Exhibit 10.1
$100,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 31, 2002
Among
ATP OIL & GAS CORPORATION
as Borrower,
THE LENDERS PARTY HERETO FROM TIME TO TIME
as Lenders,
and
UNION BANK OF CALIFORNIA, N.A.
as Administrative Agent and as Issuing Lender
GUARANTY BANK, FSB
as Co-Agent
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS..............................1
Section 1.01 Certain Defined Terms......................................1
Section 1.02 Computation of Time Periods...............................17
Section 1.03 Accounting Terms; Changes in GAAP.........................17
Section 1.04 Types of Advances.........................................18
Section 1.05 Miscellaneous.............................................18
ARTICLE II CREDIT FACILITIES............................................18
Section 2.01 Commitment for Advances...................................18
Section 2.02 Borrowing Base............................................19
Section 2.03 Method of Borrowing.......................................21
Section 2.04 Reduction of the Commitments..............................24
Section 2.05 Prepayment of Advances....................................24
Section 2.06 Repayment of Advances.....................................26
Section 2.07 Letters of Credit.........................................26
Section 2.08 Fees......................................................30
Section 2.09 Interest..................................................30
Section 2.10 Payments and Computations.................................32
Section 2.11 Sharing of Payments, Etc..................................33
Section 2.12 Breakage Costs............................................33
Section 2.13 Increased Costs...........................................34
Section 2.14 Taxes.....................................................35
Section 2.15 Replacement Lenders.......................................37
ARTICLE III CONDITIONS OF LENDING........................................38
Section 3.01 Conditions Precedent to Initial Advances..................38
Section 3.02 Conditions Precedent to All Borrowings....................41
ARTICLE IV REPRESENTATIONS AND WARRANTIES...............................41
Section 4.01 Corporate Existence; Subsidiaries.........................41
Section 4.02 Corporate Power...........................................42
Section 4.03 Authorization and Approvals...............................42
Section 4.04 Enforceable Obligations...................................42
Section 4.05 Financial Statements......................................42
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TABLE OF CONTENTS
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Section 4.06 True and Complete Disclosure..............................43
Section 4.07 Litigation................................................43
Section 4.08 Use of Proceeds...........................................43
Section 4.09 Investment Company Act....................................43
Section 4.10 Public Utility Holding Company Act........................43
Section 4.11 Taxes.....................................................44
Section 4.12 Pension Plans.............................................44
Section 4.13 Condition of Property; Casualties.........................45
Section 4.14 No Burdensome Restrictions; No Defaults...................45
Section 4.15 Environmental Condition...................................45
Section 4.16 Permits, Licenses, Etc....................................46
Section 4.17 Gas Contracts.............................................46
Section 4.18 Liens; Titles, Leases, Etc................................47
Section 4.19 Solvency and Insurance....................................47
Section 4.20 Hedging Agreements........................................47
Section 4.21 Material Agreements.......................................47
ARTICLE V AFFIRMATIVE COVENANTS........................................48
Section 5.01 Compliance with Laws, Etc.................................48
Section 5.02 Maintenance of Insurance..................................48
Section 5.03 Preservation of Corporate Existence, Etc..................50
Section 5.04 Payment of Taxes, Etc.....................................50
Section 5.05 Visitation Rights.........................................50
Section 5.06 Reporting Requirement.....................................50
Section 5.07 Maintenance of Property...................................54
Section 5.08 Agreement to Pledge.......................................54
Section 5.09 Use of Proceeds...........................................54
Section 5.10 Title Opinions............................................54
Section 5.11 Further Assurances; Cure of Title Defects.................55
Section 5.12 Trade Payables............................................55
ARTICLE VI NEGATIVE COVENANTS...........................................56
Section 6.01 Liens, Etc................................................56
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TABLE OF CONTENTS
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Section 6.02 Debts, Guaranties, and Other Obligations..................57
Section 6.03 Agreements Restricting Liens and Distributions............58
Section 6.04 Merger or Consolidation; Asset Sales......................58
Section 6.05 Restricted Payments.......................................59
Section 6.06 Investments...............................................59
Section 6.07 Affiliate Transactions....................................60
Section 6.08 Compliance with ERISA.....................................60
Section 6.09 Sale-and-Leaseback........................................61
Section 6.10 Change of Business........................................61
Section 6.11 Organizational Documents, Name Change.....................61
Section 6.12 Gas Imbalances, Take-or-Pay or Other Prepayments..........61
Section 6.13 Current Ratio.............................................61
Section 6.14 Interest Coverage Ratio...................................62
Section 6.15 Sale or Discount of Receivables...........................62
Section 6.16 Debt Coverage Ratio.......................................62
Section 6.17 Note Purchase Agreement...................................62
Section 6.18 Limitation on Leases......................................62
Section 6.19 Use of Proceeds; Letters of Credit........................63
Section 6.20 Additional Subsidiaries...................................63
Section 6.21 Foreign Subsidiaries......................................63
ARTICLE VII EVENTS OF DEFAULT; REMEDIES..................................63
Section 7.01 Events of Default.........................................63
Section 7.02 Optional Acceleration of Maturity.........................66
Section 7.03 Automatic Acceleration of Maturity........................66
Section 7.04 Right of Set-off..........................................67
Section 7.05 Non-exclusivity of Remedies...............................67
ARTICLE VIII THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER..............67
Section 8.01 Authorization and Action..................................67
Section 8.02 Administrative Agent's Reliance, Etc......................68
Section 8.03 The Administrative Agent and Its Affiliates...............68
Section 8.04 Lender Credit Decision....................................68
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Section 8.05 Indemnification...........................................69
Section 8.06 Successor Administrative Agent and Issuing Lender.........69
ARTICLE IX MISCELLANEOUS................................................70
Section 9.01 Amendments, Etc...........................................70
Section 9.02 Notices, Etc..............................................70
Section 9.03 No Waiver; Remedies.......................................71
Section 9.04 Costs and Expenses........................................71
Section 9.05 Binding Effect............................................71
Section 9.06 Lender Assignments and Participations.....................71
Section 9.07 Indemnification...........................................73
Section 9.08 Execution in Counterparts.................................74
Section 9.09 Survival of Representations, Etc..........................74
Section 9.10 Severability..............................................74
Section 9.11 Business Loans............................................74
Section 9.12 Governing Law; Submission to Jurisdiction.................74
Section 9.13 WAIVER OF JURY TRIAL......................................75
Section 9.14 Confidentiality...........................................75
Section 9.15 FINAL AGREEMENT...........................................76
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EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Guaranty
Exhibit D-1 - Form of Louisiana Mortgage
Exhibit D-2 - Form of Texas Mortgage
Exhibit E - Form of Note
Exhibit F - Form of Notice of Borrowing
Exhibit G - Form of Notice of Conversion or Continuation
Exhibit H - Form of Pledge Agreement
Exhibit I - Form of Security Agreement
Exhibit J - Form of Transfer Letters
Exhibit K - Form of Borrower's Counsel Opinion
SCHEDULES:
Schedule 1 - Borrower, Administrative Agent, and Lender
Information
Schedule 2.02(b)(v) - Borrowing Base Monthly Reduction
Schedule 4.01 - Subsidiaries
Schedule 4.05 - Existing Debt
Schedule 4.07 - Existing Litigation
Schedule 4.15 - Environmental Issues
Schedule 4.20 - Hedging Agreements
Schedule 6.01 - Certain Liens
Schedule 6.06 - Certain Investments
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AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of July 31, 2002 is
among ATP Oil & Gas Corporation, a Texas corporation ("Borrower"), the Lenders
(as defined below), Union Bank of California, N.A., as Administrative Agent and
as Issuing Lender (each as defined below) for the Lenders.
RECITALS
A. The Borrower is a party to a Credit Agreement dated as of April 27,
2001, as amended by that certain (i) First Amendment to Credit Agreement dated
as of June 29, 2001, (ii) Second Amendment to Credit Agreement dated as of June
29, 2001, (iii) Third Amendment to Credit Agreement dated as of June 30, 2001,
(iv) Fourth Amendment to Credit Agreement dated as of October 1, 2001, (v) Fifth
Amendment to Credit Agreement dated as of November 5, 2001, (vi) Sixth Amendment
to Credit Agreement dated as of January 31, 2002, (vii) Seventh Amendment to
Credit Agreement dated as of February 28, 2002, (viii) Eighth Amendment to
Credit Agreement dated as of March 27, 2002, and (ix) Letter Agreement dated as
of May 10, 2002 (as so amended, the "Existing Credit Agreement") among the
Borrower, the lenders party thereto, and the Administrative Agent.
B. In order to secure the full and punctual payment and performance of the
loans under the Existing Credit Agreement, the Borrower has executed and
delivered mortgages, collateral assignments, security agreements, pledge
agreements and financing statements (collectively, the "Existing Security
Instruments") granting a mortgage lien and continuing security interest in and
to the collateral described in such Existing Security Instruments.
C. The Borrower, the Administrative Agent, the Issuing Lender and the
Lenders wish to amend and restate the Existing Credit Agreement and the Existing
Security Instruments, renew and extend the loans under the Existing Credit
Agreement and amend and restate the notes evidencing such loans under the
Existing Credit Agreement.
Now, therefore, the Borrower, the Administrative Agent, the Issuing Lender,
and the Lenders do hereby agree that the Existing Credit Agreement is amended
and restated as follows and the notes evidencing the loans under the Existing
Credit Agreement are amended and restated to provide as stated in the Notes (as
defined below):
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. As used in this Agreement, the terms
defined above shall have the meanings set forth therein and the following terms
shall have the following meanings (unless otherwise indicated, such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
"Acceptable Security Interest" in any Property means a Lien which (a)
exists in favor of the Administrative Agent for the benefit of the
Administrative Agent, the Issuing Lender, the Lenders, and any Swap
Counterparty, (b) is superior to all Liens or rights of any other Person in
the Property encumbered thereby, with the exception of Permitted Liens, (c)
secures the Obligations, and (d) is perfected and enforceable.
"Acquisition" means the purchase by the Borrower or any of its Subsidiaries
of any business, including the purchase of associated assets or operations or of
stock (or other ownership interests) of a Person.
"Adjusted Reference Rate" means, for any day, the fluctuating rate per
annum of interest equal to the greater of (a) the Reference Rate in effect on
such day and (b) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
"Administrative Agent" means Union Bank of California, N.A., in its
capacity as agent pursuant to Article VIII, and any successor agent pursuant to
Section 8.06.
"Advance" means any advance by a Lender to the Borrower as part of a
Borrowing and refers to a Reference Rate Advance or a Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of a Control Percentage, by contract, or otherwise.
"Agreement" means this Amended and Restated Credit Agreement, as the same
may be amended, supplemented, and otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Reference Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means, at any time except as otherwise specifically set
out in this definition, the applicable per annum percentage set forth at the
appropriate intersection in the table shown below, based on the Borrowing Base
Utilization as in effect from time to time:
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Borrowing Base Utilization Applicable Margin
------------------------------------------------------------------------ -------------
Eurodollar Rate Advance Reference Rate Advance
--------------------------------------------------------------------------------------
Less than 25% 2.25% 0.25%
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Greater than or equal to 25% but 2.50% 0.50%
less than 50%
--------------------------------------------------------------------------------------
Greater than or equal to 50% but 2.875% 0.75%
less than 75%
--------------------------------------------------------------------------------------
Greater than or equal to 75% 3.125% 1.00%
--------------------------------------------------------------------------------------
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;provided, however, at any time that a Borrowing Base Deficiency exists, the
"Applicable Margin" shall be increased by an additional 2.00% in excess of the
Applicable Margin that would otherwise apply if no Borrowing Base Deficiency
existed.
"Aquila" means Aquila Energy Capital Corporation, a Delaware corporation.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
in substantially the form of the attached Exhibit A.
"ATP (Netherlands)" means ATP Oil & Gas (Netherlands) B.V., a business
corporation formed under the laws of The Netherlands.
"ATP (UK)" means ATP Oil & Gas (UK) Ltd., a private limited company formed
under the laws of England and Wales.
"Borrowing" means, subject to Section 2.03(c)(iii), a borrowing consisting
of simultaneous Advances of the same Type made by each Lender pursuant to
Section 2.03(a), continued by each Lender pursuant to Section 2.03(b), or
Converted by each Lender to Advances of a different Type pursuant to Section
2.03(b).
"Borrowing Base" means, at any particular time, the Dollar amount
determined in accordance with Section 2.02 on account of Proven Reserves
attributable to Oil and Gas Properties of the Borrower and its Subsidiaries,
other than Foreign Subsidiaries, owning Oil and Gas Properties, if any,
described in the most recent Independent Engineering Report or Internal
Engineering Report, as applicable, delivered to the Administrative Agent and the
Lenders pursuant to Section 2.02.
"Borrowing Base Utilization" means, at any time, an amount equal to the
quotient of (i) the aggregate principal amount of Advances outstanding at such
time plus the Letter of Credit Exposure at such time, divided by (ii) the
Borrowing Base in effect at such time.
"Business Day" means a day of the year on which banks are not required or
authorized to close in Dallas, Texas and Los Angeles, California and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on by banks in the London interbank market.
"Capital Expenditures" means, for the Borrower and its Subsidiaries (other
than Foreign Subsidiaries) for any period, the aggregate of all expenditures and
costs paid by the Borrower and such Subsidiaries during such period that are for
items which are capital in nature, including intangible drilling and development
expenditures.
"Capital Leases" means, as applied to any Person, any lease of any Property
by such Person as lessee which would, in accordance with GAAP, be required to be
classified and accounted for as a capital lease on the balance sheet of such
Person.
"Cash Collateral Account" means a special interest bearing cash collateral
account pledged by the Borrower to the Issuing Lender containing cash deposited
pursuant to Sections
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2.05(b), 7.02(b), or 7.03(b) to be maintained with the Issuing Lender in
accordance with Section 2.07(g) and bear interest or be invested in the Issuing
Lender's reasonable discretion.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.
"Change in Control" means the occurrence of any of the following:
(a) the acquisition by any Person (or group of Persons acting together) of
a direct or indirect interest in more than 30% of the voting power of the voting
stock of the Borrower, by way of merger or consolidation or otherwise, or
(b) during any consecutive 12 month period, Continuing Directors cease to
constitute a majority of the board of directors then in office.
For purposes of this definition, any transfer of an equity interest of an
entity that was formed for the purpose of acquiring voting stock of the Borrower
will be deemed to be a transfer of such portion of such voting stock as
corresponds to the portion of the equity of such entity that has been so
transferred, and the acquisition of voting power of the voting stock of the
Borrower by any Subsidiary of the Borrower shall be disregarded. For purposes of
this definition, the term "Continuing Directors" shall mean any member of the
board of directors of the Borrower on the date hereof, any member elected since
the date hereof in an annual meeting of the stockholders upon the recommendation
of the board of directors of the Borrower, and any member of the board of
directors who was recommended by or elected to succeed a Continuing Director by
a majority of Continuing Directors who are then members of the board of
directors.
"Chapter One" has the meaning set forth in Section 9.11.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Collateral" means all "Collateral", "Pledged Collateral" and "Mortgaged
Properties" (as defined in each of the Mortgages, the Security Agreements, and
the Pledge Agreement) or similar terms used in the Security Instruments.
"Commitment" means, for any Lender, the amount set opposite such Lender's
name on the signature pages hereof as its Commitment, or if such Lender has
entered into any Assignment and Acceptance, as set forth for such Lender as its
Commitment in the Register maintained by the Administrative Agent pursuant to
Section 9.06(c), as such amount may be reduced, modified or terminated pursuant
to this Agreement.
"Commitment Termination Date" means the earlier of (a) the Maturity Date
and (b) the earlier termination in whole of the Commitments pursuant to Section
2.04, 2.15, or Article VII.
"Compliance Certificate" means a compliance certificate in the form of the
attached Exhibit B signed by a Responsible Officer of the Borrower.
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"Consolidated Net Income" means, with respect to the Borrower and its
consolidated Subsidiaries (other than Foreign Subsidiaries), for any period, the
net income for such period after taxes, as determined in accordance with GAAP,
excluding, however, (a) extraordinary items, including (i) any net non-cash gain
or loss during such period arising from the sale, exchange, retirement or other
disposition of capital assets (such term to include all fixed assets and all
securities) other than in the ordinary course of business, and (ii) any write-up
or write-down of assets and (b) the cumulative effect of any change in GAAP.
"Control Percentage" means, with respect to any Person, the percentage of
the outstanding capital stock (or other ownership interests and including any
options, warrants or similar rights to purchase such capital stock) of such
Person having ordinary voting power which gives the direct or indirect holder of
such stock or ownership interests the power to elect a majority of the board of
directors (or other applicable governing body) of such Person.
"Controlled Group" means all members of a controlled group of corporations
and all businesses (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414
of the Code.
"Convert," "Conversion," and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.03(b).
"Debt," means, for any Person, without duplication:
(a) indebtedness of such Person for borrowed money, including obligations
under letters of credit and agreements relating to the issuance of letters of
credit or acceptance financing;
(b) obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(c) obligations of such Person to pay the deferred purchase price of
property or services (including obligations that are non-recourse to the credit
of such Person but are secured by the assets of such Person, but excluding trade
accounts payable);
(d) obligations of such Person as lessee under Capital Leases and
obligations of such Person in respect of synthetic leases;
(e) obligations of such person under any Interest Hedge Agreement or
Hydrocarbon Hedge Agreement;
(f) obligations of such Person owing in respect of redeemable preferred
stock of such Person;
(g) any obligations in connection with any volumetric or production
prepayments;
(h) obligations of such Person under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) of such Person to purchase
or otherwise acquire, or
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otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (g) above;
(i) indebtedness or obligations of others of the kinds referred to in
clauses (a) through (h) above secured by any Lien on or in respect of any
Property of such Person; and
(j) all liabilities of such Person in respect of unfunded vested benefits
under any Plan.
"Default" means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would become an Event of Default.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" opposite its name on
Schedule 1 or such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"EBITDA" means, for the Borrower for any period, (a) Consolidated Net
Income for such period plus (b) to the extent deducted in determining
Consolidated Net Income, Interest Expense, taxes, depreciation, amortization and
other non-cash charges of the relevant entities for such period.
"Eligible Assignee" means (a) any Lender and (b) any commercial bank or
other financial institution approved by the Administrative Agent in its sole
discretion, and if no Event of Default exists, by the Borrower which approval
shall not be unreasonably withheld.
"Engineering Report" means either an Independent Engineering Report or an
Internal Engineering Report.
"Environment" or "Environmental" shall have the meanings set forth in 43
U.S.C. 9601(8) (1988).
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating to
health or safety of employees) which seeks to impose liability under any
Environmental Law.
"Environmental Law" means, as to the Borrower or its Subsidiaries, all
Legal Requirements or common law theories applicable to the Borrower or its
Subsidiaries arising from, relating to, or in connection with the Environment,
health, or safety, including CERCLA, relating to (a) pollution, contamination,
injury, destruction, loss, protection, cleanup, reclamation or restoration of
the air, surface water, groundwater, land surface or subsurface strata, or other
natural resources; (b) solid, gaseous or liquid waste generation, treatment,
processing, recycling, reclamation, cleanup, storage, disposal or
transportation; (c) exposure to pollutants,
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contaminants, hazardous, medical infections, or toxic substances, materials or
wastes; (d) the safety or health of employees; or (e) the manufacture,
processing, handling, transportation, distribution in commerce, use, storage or
disposal of hazardous, medical infectious, or toxic substances, materials or
wastes.
"Environmental Permit" means any permit, license, order, registration,
approval or other authorization under Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
which is a member of a group of which the Borrower is a member and which is
under common control within the meaning of the regulations under Section 414(b),
(c), (m) or (o) of the Code.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Eurodollar Lending Office" opposite its name on
Schedule 1 (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time specify to
the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Rate
Advance comprising the same Borrowing, the interest rate per annum (rounded
upward to the nearest whole multiple of 1/100 of 1% per annum) set forth on page
3750 of the Telerate screen (or any successor thereto) as the London Interbank
Offered Rate, for deposits in Dollars at 11:00 a.m. (London, England time) two
Business Days before the first day of such Interest Period and for a period
equal to such Interest Period; provided that, if no such quotation appears on
the applicable page of the Telerate screen (or any successor thereto), the
Eurodollar Rate shall be an interest rate per annum equal to the rate per annum
at which deposits in Dollars are offered by the principal office of Union Bank
of California, N.A. in London, England to prime banks in the London interbank
market at 11:00 a.m. (London, England time) two Business Days before the first
day of such Interest Period in an amount substantially equal to the Eurodollar
Rate Advance to be maintained by the Lender that is the Administrative Agent in
respect of such Borrowing and for a period equal to such Interest Period.
"Eurodollar Rate Advance" means an Advance which bears interest as provided
in Section 2.09(b).
"Eurodollar Rate Reserve Percentage" of any Lender for the Interest Period
for any Eurodollar Rate Advance means the reserve percentage applicable during
such Interest Period (or if more than one such percentage shall be so
applicable, the daily average of such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) under
regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental, or other marginal
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reserve requirement) for such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Event of Default" has the meaning specified in Section 7.01.
"Expiration Date" means, with respect to any Letter of Credit, the date on
which such Letter of Credit will expire or terminate in accordance with its
terms.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for any such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System or any of its successors.
"Financial Statements" means the audited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at December 31, 2001, and the
related audited consolidated statements of income, cash flow, and retained
earnings of the Borrower and its consolidated Subsidiaries for the fiscal year
then ended and referred to in Section 4.05, copies of which have been delivered
to the Administrative Agent and the Lenders.
"Foreign Subsidiaries" means ATP (UK), ATP (Netherlands) and any additional
Subsidiaries of the Borrower or any of its Subsidiaries formed, in compliance
with applicable provisions of this Agreement, under the laws of a country other
than the United States.
"Foreign Subsidiary Investments" has the meaning specified in Section 6.21.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the requirements of
Section 1.03.
"Governmental Authority" means, as to any Person in connection with any
subject, any foreign, national, state or provincial governmental authority, or
any political subdivision of any state thereof, or any agency, department,
commission, board, authority or instrumentality, bureau or court, in each case
having jurisdiction over such Person or such Person's Property in connection
with such subject.
"Guarantor" means each entity executing a Guaranty, including each
Subsidiary of the Borrower other than Foreign Subsidiaries.
"Guaranty" means a Guaranty in substantially the form of the attached
Exhibit C and executed by a Guarantor, and "Guaranties" shall mean all such
guaranties collectively.
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"Hazardous Substance" means the substances identified as such pursuant to
CERCLA and those regulated under any other Environmental Law, including
pollutants, contaminants, petroleum, petroleum products, radionuclides,
radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to any
Environmental Law.
"Hydrocarbon Hedge Agreement" means a swap, collar, floor, cap, option,
forward sale or purchase or other contract (including sales contracts with known
prices) which is intended to reduce or eliminate the risk of fluctuations in the
price of Hydrocarbons.
"Hydrocarbons" means oil, gas, coal seam gas, casinghead gas, drip
gasoline, natural gasoline, condensate, distillate, and all other liquid and
gaseous hydrocarbons produced or to be produced in conjunction therewith from a
well bore and all products, by-products, and other substances derived therefrom
or from the processing thereof, and all other minerals and substances produced
in conjunction with such substances, including sulfur, geothermal steam, water,
carbon dioxide, helium, and any and all minerals, ores, or substances of value
and the products and proceeds therefrom.
"Independent Engineer" means ▇▇▇▇▇ ▇▇▇▇▇ Company, ▇.▇. ▇▇▇▇▇▇▇▇ &
Associates, Inc., or any other engineering firm acceptable to the Administrative
Agent.
"Independent Engineering Report" means a report, in form and substance
satisfactory to the Administrative Agent and each of the Lenders, prepared by an
Independent Engineer, addressed to the Administrative Agent and the Lenders with
respect to the Oil and Gas Properties owned by the Borrower or any of its
Subsidiaries (other than Foreign Subsidiaries) or to be acquired by the Borrower
or any of such Subsidiaries, as applicable, which are or are to be included in
the Borrowing Base, which report shall (a) specify the location, quantity, and
type of the estimated Proven Reserves attributable to such Oil and Gas
Properties, (b) contain a projection of the rate of production of such Oil and
Gas Properties, (c) contain an estimate of the net operating revenues to be
derived from the production and sale of Hydrocarbons from such Proven Reserves
based on product price and cost escalation assumptions specified by the
Administrative Agent and the Lenders, and (d) contain such other information as
is customarily obtained from and provided in such reports or is otherwise
reasonably requested by the Administrative Agent or any Lender.
"Interest Expense" means, for the Borrower and its consolidated
Subsidiaries (other than Foreign Subsidiaries) for any period, total interest,
letter of credit fees, and other fees and expenses incurred in connection with
any Debt of the relevant entities for such period, whether paid or accrued,
including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Hedge Agreements and Hydrocarbon Hedge Agreements, all as
determined in conformity with GAAP.
"Interest Hedge Agreement" means an interest hedge, rate swap, or cap, or
similar arrangement between the Borrower and one or more financial institutions
providing for the
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exchange of nominal interest obligations between the Borrower and such financial
institution or the cap of the interest rate on any Debt of the Borrower.
"Interest Period" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Reference Rate Advance into a
Eurodollar Rate Advance and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and Section 2.03 and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and Section 2.03. The duration of each
such Interest Period shall be one, two, three, or six months, in each case as
the Borrower may, upon notice received by the Administrative Agent not later
than 10:00 a.m. (Dallas, Texas time) on the third Business Day prior to the
first day of such Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period which ends after the
then existing Commitment Termination Date;
(b) Interest Periods commencing on the same date for Advances comprising
part of the same Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(d) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month.
"Interim Financial Statements" means the unaudited balance sheet of the
Borrower and its consolidated Subsidiaries dated March 31, 2002, and the related
unaudited statements of income, cash flow, and retained earnings of the Borrower
and its consolidated Subsidiaries for the three months then ended and referred
to in Section 4.05, copies of which have been delivered to the Administrative
Agent and the Lenders.
"Internal Engineering Report" means a report, in form and substance
satisfactory to the Administrative Agent and each Lender, prepared by the
Borrower and certified by a Responsible Officer of the Borrower, addressed to
the Administrative Agent and the Lenders with respect to the Oil and Gas
Properties owned by the Borrower or any of its Subsidiaries (other than Foreign
Subsidiaries) or to be acquired by the Borrower or any of such Subsidiaries, as
applicable, which are or are to be included in the Borrowing Base, which report
shall (a) specify the location, quantity, and type of the estimated Proven
Reserves attributable to such Oil and Gas Properties, (b) contain a projection
of the rate of production of such Oil and Gas Properties, (c) contain an
estimate of the net operating revenues to be derived from the production and
sale of Hydrocarbons from such Proven Reserves based on product price and cost
escalation
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assumptions specified by the Administrative Agent and the Lenders, and (d)
contain such other information as is customarily obtained from and provided in
such reports or is otherwise reasonably requested by the Administrative Agent or
any Lender.
"Issuing Lender" means Union Bank of California, N.A., or any successor
issuing lender pursuant to Section 8.06.
"Leases" means all oil and gas leases, oil, gas and mineral leases, oil,
gas and casinghead gas leases or any other instruments, agreements, or
conveyances under and pursuant to which the owner thereof has or obtains the
right to enter upon lands and explore for, drill, and develop such lands for the
production of Hydrocarbons.
"Legal Requirement" means, as to any Person, any law, statute, ordinance,
decree, requirement, order, judgment, rule, regulation (or official
interpretation of any of the foregoing) of, and the terms of any license or
permit issued by, any Governmental Authority, including but Regulations D, T, U,
and X, which is applicable to such Person.
"Lender Termination Date" has the meaning specified in Section 2.15(b).
"Lenders" means the lenders listed on the signature pages of this Agreement
and each Eligible Assignee that shall become a party to this Agreement pursuant
to Section 9.06.
"Letter of Credit" means, individually, any standby letter of credit issued
by the Issuing Lender for the account of the Borrower in connection with the
Commitments and which is subject to this Agreement, and "Letters of Credit"
means all such letters of credit collectively.
"Letter of Credit Application" means the Issuing Lender's standard form
letter of credit application for standby letters of credit which has been
executed by the Borrower and accepted by the Issuing Lender in connection with
the issuance of a Letter of Credit.
"Letter of Credit Documents" means all Letters of Credit, Letter of Credit
Applications, and agreements, documents, and instruments entered into in
connection with or relating thereto.
"Letter of Credit Exposure" means, at any time, the sum of (a) the
aggregate undrawn maximum face amount of each Letter of Credit at such time plus
(b) the aggregate unpaid amount of all Reimbursement Obligations at such time.
"Letter of Credit Obligations" means any obligations of the Borrower under
this Agreement in connection with the Letters of Credit, including the
Reimbursement Obligations.
"Lien" means any mortgage, lien, pledge, assignment, charge, deed of trust,
security interest, hypothecation, preference, deposit arrangement or encumbrance
(or other type of arrangement having the practical effect of the foregoing) to
secure or provide for the payment of any obligation of any Person, whether
arising by contract, operation of law, or otherwise (including the interest of a
vendor or lessor under any conditional sale agreement, synthetic lease, Capital
Lease, or other title retention agreement).
"Liquid Investments" means:
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(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States maturing within 180
days from the date of any acquisition thereof;
(b) (i) negotiable or nonnegotiable certificates of deposit, time deposits,
or other similar banking arrangements maturing within 180 days from the date of
acquisition thereof ("bank debt securities"), issued by (A) any Lender (or any
Affiliate of any Lender) or (B) any other bank or trust company so long as such
certificate of deposit is pledged to secure the Borrower's or any of its
Subsidiaries' ordinary course of business bonding requirements, or any other
bank or trust company which has primary capital of not less than
$500,000,000.00, if at the time of deposit or purchase, such bank debt
securities are rated not less than "AA" (or the then equivalent) by the rating
service of Standard & Poor's Ratings Group or of ▇▇▇▇▇'▇ Investors Service,
Inc., and (ii) commercial paper issued by (A) any Lender (or any Affiliate of
any Lender) or (B) any other Person if at the time of purchase such commercial
paper is rated not less than "A-1" (or the then equivalent) by the rating
service of Standard & Poor's Ratings Group or not less than "P-1" (or the then
equivalent) by the rating service of ▇▇▇▇▇'▇ Investors Service, Inc., or upon
the discontinuance of both of such services, such other nationally recognized
rating service or services, as the case may be, as shall be selected by the
Borrower with the consent of the Majority Lenders;
(c) deposits in money market funds investing exclusively in investments
described in clauses (a) and (b) above; and
(d) repurchase agreements relating to investments described in clauses (a)
and (b) above with a market value at least equal to the consideration paid in
connection therewith, with any Person who regularly engages in the business of
entering into repurchase agreements and has a combined capital surplus and
undivided profit of not less than $500,000,000.00, if at the time of entering
into such agreement the debt securities of such Person are rated not less than
"AA" (or the then equivalent) by the rating service of Standard & Poor's Ratings
Group or of ▇▇▇▇▇'▇ Investors Service, Inc.; and
(e) such other instruments (within the meaning of Article 9 of the Texas
Business and Commerce Code) as the Borrower may request and the Administrative
Agent may approve in writing, which approval will not be unreasonably withheld.
"Loan Documents" means this Agreement, the Notes, the Letter of Credit
Documents, the Guaranties, the Security Instruments, any Interest Hedge
Agreements with a Swap Counterparty, any Hydrocarbon Hedge Agreements with a
Swap Counterparty, and each other agreement, instrument, or document executed by
the Borrower, any of its Subsidiaries or any of their officers at any time in
connection with this Agreement.
"Lost Interest" has the meaning set forth in Section 2.09(d).
"Majority Lenders" means, at any time, Lenders holding in the aggregate at
least 70% of the then aggregate unpaid principal amount of the Notes held by the
Lenders and the Letter of Credit Exposure of the Lenders at such time;
provided that, if no such principal amount or Letter
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of Credit Exposure is then outstanding, "Majority Lenders" shall mean Lenders
having at least 70% of the aggregate amount of the Commitments at such time.
"Material Adverse Change" means (a) a material adverse change in the
business, assets (including the Oil and Gas Properties of the Borrower and its
Subsidiaries, other than Foreign Subsidiaries), financial condition, or results
of operations of the Borrower or any Subsidiary (other than Foreign
Subsidiaries) since March 31, 2002 or (b) a material adverse effect on the
Borrower's or any such Subsidiary's ability to perform its obligations under
this Agreement, any Note, any Guaranty, or any other Loan Document to which such
entity is a party.
"Maturity Date" means May 7, 2004.
"Maximum Rate" means the maximum nonusurious interest rate under applicable
law (determined under such laws after giving effect to any items which are
required by such laws to be construed as interest in making such determination,
including, if required by such laws, certain fees and other costs).
"Mortgages" means, collectively, each of the Mortgages, Deeds of Trust,
Assignments of Production, Security Agreements, Fixture Filing and Financing
Statements and any other mortgage or deed of trust executed by any one or more
of the Borrower or any of its Subsidiaries (other than Foreign Subsidiaries) in
favor of or for the benefit of the Administrative Agent for the ratable benefit
of the Administrative Agent, the Issuing Lender, the Lenders, and any Swap
Counterparty in substantially the form of the attached Exhibit D-1 or Exhibit
D-2 or such other form as may be requested by Administrative Agent in its
reasonable discretion, as the same may be amended, restated, modified or
supplemented from time-to-time, together with any assumptions or assignments of
the obligations thereunder by the Borrower or any such Subsidiary , and
"Mortgages" shall mean all of such Mortgages collectively.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.
"Note" means a promissory note of the Borrower payable to the order of any
Lender, in substantially the form of the attached Exhibit E, evidencing
indebtedness of the Borrower to such Lender resulting from Advances owing to
such Lender.
"Note Purchase Agreement" shall mean that certain Note Purchase Agreement
dated as of June 29, 2001, as amended by that certain First Amendment to Note
Purchase and Sale Agreement dated March 27, 2002, by and between the Borrower
and Aquila pursuant to which the Borrower, in accordance with the provisions
thereof, owes or may owe to Aquila up to $34,320,000, plus interest, fees and
other costs due thereunder.
"Notice of Borrowing" means a notice of borrowing in the form of the
attached Exhibit F signed by a Responsible Officer of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
continuation in the form of the attached Exhibit G signed by a Responsible
Officer of the Borrower.
"Notice of Termination" has the meaning specified in Section 2.15(a).
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"Obligations" means (a) all principal, interest, fees, reimbursements,
indemnifications, and other amounts payable by the Borrower and its Subsidiaries
to the Administrative Agent, the Issuing Lender or the Lenders under the Loan
Documents, including the Letter of Credit Obligations and (b) all obligations of
the Borrower and its Subsidiaries (other than Foreign Subsidiaries) owing to any
Swap Counterparty under any Interest Hedge Agreement or Hydrocarbon Hedge
Agreement.
"Oil and Gas Properties" means fee mineral interests, term mineral
interests, Leases, subleases, farm-outs, royalties, overriding royalties, net
profit interests, carried interests, production payments and similar mineral
interests, and all unsevered and unextracted Hydrocarbons in, under, or
attributable to such oil and gas Properties and interests.
"Other Taxes" has the meaning set forth in Seciton 2.14(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permit" means any approval, certificate of occupancy, consent, waiver,
exemption, variance, franchise, order, permit, authorization, right or license
of or from any Governmental Authority, including an Environmental Permit.
"Permitted Liens" means the Liens permitted to exist pursuant to Section
6.01.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability corporation or company,
limited liability partnership, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or agency thereof
or any trustee, receiver, custodian or similar official.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code.
"Pledge Agreement" means a Pledge Agreement in the form of the attached
Exhibit H, executed by the Borrower or any of its Subsidiaries (other than
Foreign Subsidiaries) or any of the Guarantors, as the same may be amended,
restated, supplemented or otherwise modified from time to time, and "Pledge
Agreements" shall mean all of such Pledge Agreements collectively.
"Property" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
"Proven Reserves" means, at any particular time, the estimated quantities
of Hydrocarbons which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
attributable to Oil and Gas Properties included or to be included in the
Borrowing Base under then existing economic and operating conditions (i.e.,
prices and costs as of the date the estimate is made). The prices used may
include consideration of changes in existing prices provided only by contractual
arrangements, but not on escalations based upon future conditions.
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"Pro Rata Share" means, with respect to any Lender, either (a) the ratio
(expressed as a percentage) of such Lender's Commitment at such time to the
aggregate Commitments at such time or (b) if the Commitments have been
terminated, the ratio (expressed as a percentage) of such Lender's aggregate
outstanding Advances and Letter of Credit Exposure at such time to the aggregate
outstanding Advances and Letter of Credit Exposure of all the Lenders at such
time.
"Reference Rate" means a fluctuating interest rate per annum as shall be in
effect from time to time equal to the rate of interest publicly announced by
Union Bank of California, N.A., as its reference rate, whether or not the
Borrower has notice thereof.
"Reference Rate Advance" means an Advance which bears interest as provided
in Section 2.09(a).
"Register" has the meaning set forth in paragraph (c) of Section 9.06.
"Regulations D, T, U, and X" mean Regulations D, T, U, and X of the Federal
Reserve Board, as the same are from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Reimbursement Obligations" means all of the obligations of the Borrower to
reimburse the Issuing Lender for amounts paid by the Issuing Lender under
Letters of Credit as established by the Letter of Credit Applications and
Section 2.07(d).
"Release" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"Replacement Lenders" has the meaning specified in Section 2.15(b).
"Response" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"Responsible Officer" means (a) with respect to any Person that is a
corporation, such Person's Chief Executive Officer, President, Chief Financial
Officer, or Vice President, (b) with respect to any Person that is a limited
liability company, such Person's Chief Executive Officer, President, Chief
Financial Officer, or Vice President, or such Person's manager or the
Responsible Officer of such Person's managing member or manager, and (c) with
respect to any Person that is a partnership, the Responsible Officer of such
Person's general partner or partners.
"Restricted Payment" means, with respect to any Person, (a) any dividends
or other distributions (in cash, property, or otherwise) on, or any payment for
the purchase, redemption, or other acquisition of, any shares of any capital
stock or other equity interests (including partnership interests and membership
interests) of such Person, other than dividends payable in such Person's stock
or other equity interests or (b) principal or interest payments (in cash,
property or otherwise) on, or redemptions of, subordinated debt of such Person.
"Returns" has the meaning set forth in Section 4.11(c).
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"Security Agreements" means the Security Agreements, each in substantially
the form of the attached Exhibit I, executed by the Borrower, any of its
Subsidiaries (other than Foreign Subsidiaries), or any of the Guarantors as the
same may be amended, modified, or supplemented from time to time.
"Security Instruments" means, collectively, (a) the Mortgages, (b) the
Transfer Letters, (c) the Pledge Agreements, (d) the Security Agreements, (e)
each agreement, instrument or document executed in connection with the Cash
Collateral Account, (f) each other agreement, instrument or document executed at
any time in connection with the Pledge Agreements, the Security Agreements, or
the Mortgages, and (g) each other agreement, instrument or document executed at
any time in connection with securing the Obligations.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including contingent liabilities, of such Person,
(b) the present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person is able
to realize upon its assets and pay its debts and other liabilities, contingent
obligations, and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's Property would constitute unreasonably small capital after giving
due consideration to current and anticipated future capital requirements and
current and anticipated future business conduct and the prevailing practice in
the industry in which such Person is engaged. In computing the amount of
contingent liabilities at any time, such liabilities shall be computed at the
amount which, in light of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Subordination Agreement" means that certain Intercreditor and
Subordination Agreement dated as of June 29, 2001 by and among the Borrower, the
Administrative Agent, the Lenders and Aquila.
"Subsidiary" of a Person means any corporation or other entity of which
more than 50% of the outstanding shares of capital stock or other ownership
interests having ordinary voting power under ordinary circumstances to elect a
majority of the board of directors or similar governing body of such corporation
or other entity (irrespective of whether at such time capital stock or other
ownership interests of any other class or classes of such corporation or other
entity shall or might have voting power upon the occurrence of any contingency)
is at the time directly or indirectly owned or controlled by such Person, by
such Person and one or more Subsidiaries of such Person or by one or more
Subsidiaries of such Person. Unless otherwise indicated herein, each reference
to the term "Subsidiary" shall mean a Subsidiary of the Borrower.
"Swap Counterparty" means any Lender (or any Affiliate of a Lender) that is
party to a Hydrocarbon Hedge Agreement or Interest Hedge Agreement with the
Borrower or any of its Subsidiaries (other than Foreign Subsidiaries).
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"Taxes" has the meaning set forth in Section 2.14(a) or 4.11 (b) as the
case may be.
"Tax Group" has the meaning set forth in Section 4.11(a).
"Terminated Lender" has the meaning specified in Section 2.15(a).
"Termination Event" means (a) a Reportable Event described in Section 4043
of ERISA and the regulations issued thereunder (other than a Reportable Event
not subject to the provision for 30-day notice to the PBGC under such
regulations), (b) the withdrawal of the Borrower or any of its Affiliates from a
Plan during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a
Plan or the treatment of a Plan amendment as a termination under Section 4041 of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or
(e) any other event or condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan.
"Transfer" shall mean any sale, assignment, farm-out, conveyance or other
transfer of any Oil and Gas Property, or any interest in any Oil and Gas
Property (including any working interest, overriding royalty interest,
production payment, net profits interest, royalty interest, or mineral fee
interest) of the Borrower, any of its Subsidiaries (other than Foreign
Subsidiaries) or any Guarantor, except for (i) the sale of Hydrocarbons in the
ordinary course of business, (ii) the sale or transfer of equipment that is (A)
obsolete, worn out, depleted or uneconomic and disposed of in the ordinary
course of business, (B) no longer necessary for the business of such Person or
(C) contemporaneously replaced by equipment of at least comparable value and
use, and (iii) the sale, in any one fiscal year, of Oil and Gas Properties of
the Borrower, any Subsidiary (other than Foreign Subsidiaries) or any Guarantor
which in the aggregate have a fair market value less than or equal to the lesser
of (A) $2,000,000 and (B) five percent (5%) of the net book value of the Oil and
Gas Properties of the Borrower.
"Transfer Letters" means, collectively, the letters in lieu of transfer
orders in the form of the attached Exhibit J, executed by the Borrower and any
of its Subsidiaries executing a Mortgage as each of the same may be amended,
modified or supplemented from time-to-time.
"Type" has the meaning set forth in Section 1.04.
"▇▇▇▇▇" has the meaning set forth in Section 2.02(b).
Section 1.02 Computation of Time Periods. In this Agreement, with respect
to the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding".
Section 1.03 Accounting Terms; Changes in GAAP. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lenders hereunder shall
(unless otherwise disclosed to the Lenders in writing at the time of delivery
thereof) be prepared, in accordance with GAAP applied on a basis consistent with
those used in the preparation of the latest financial statements furnished to
the Lenders hereunder (which prior to the delivery of the first financial
statements under Section 5.06 hereof, shall
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mean the Financial Statements and the Interim Financial Statements). All
calculations made for the purposes of determining compliance with this Agreement
shall (except as otherwise expressly provided herein) be made by application of
GAAP applied on a basis consistent with those used in the preparation of the
annual or quarterly financial statements furnished to the Lenders pursuant to
Section 5.06 hereof most recently delivered prior to or concurrently with such
calculations (or, prior to the delivery of the first financial statements under
Section 5.06 hereof, used in the preparation of the Financial Statements and the
Interim Financial Statements). In addition, all calculations and defined
accounting terms used herein shall, unless expressly provided otherwise, when
referring to any Person, refer to such Person on a consolidated basis and mean
such Person and its consolidated subsidiaries.
Section 1.04 Types of Advances. Advances are distinguished by "Type." The
"Type" of an Advance refers to the determination whether such Advance is a
Eurodollar Rate Advance or Reference Rate Advance.
Section 1.05 Miscellaneous. Article, Section, Schedule, and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified. All references to instruments, documents,
contracts, and agreements are references to such instruments, documents,
contracts, and agreements as the same may be amended, supplemented, and
otherwise modified from time to time, unless otherwise specified. The words
"hereof", "herein", and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The term "including" means "including,
without limitation,". Paragraph headings have been inserted in this Agreement as
a matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.
ARTICLE II
CREDIT FACILITIES
Section 2.01 Commitment for Advances.
(a) Advances. Each Lender severally agrees, on the terms and conditions set
forth in this Agreement, to make Advances to the Borrower from time to time on
any Business Day during the period from the date of this Agreement until the
Commitment Termination Date; provided that, the sum of (i) the aggregate
outstanding principal amount of such Lender's Pro Rata Share of the Advances
plus (ii) such Lender's Pro Rata Share of the Letter of Credit Exposure may not
exceed at any time the lesser of (A) such Lender's Pro Rata Share of the
Borrowing Base and (B) such Lender's Commitment. Each Borrowing shall, in the
case of Borrowings consisting of Reference Rate Advances, be in an aggregate
amount not less than $500,000 and in integral multiples of $100,000 in excess
thereof, and in the case of Borrowings consisting of Eurodollar Rate Advances,
be in an aggregate amount not less than $1,000,000 or in integral multiples of
$1,000,000 in excess thereof, and in each case shall consist of Advances of the
same Type made on the same day by the Lenders ratably according to their
respective Commitments. For the avoidance of doubt, the preceding sentence shall
not prohibit the Borrower from requesting Reference Rate Advances and Eurodollar
Rate Advances to be made
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on the same day. Within the limits of each Lender's Commitment, and subject to
the terms of this Agreement, the Borrower may from time to time borrow, prepay,
and reborrow Advances.
(b) Notes. The indebtedness of the Borrower to each Lender resulting from
the Advances owing to such Lender shall be evidenced by a Note of the Borrower
payable to the order of such Lender.
Section 2.02 Borrowing Base.
(a) Borrowing Base. The initial Borrowing Base in effect as of the date of
this Agreement has been set by the Administrative Agent and the Lenders and
acknowledged by the Borrower as $62,000,000.00 and shall remain in effect until
the next redetermination made pursuant to this Section 2.02. The Borrowing Base
shall be determined in accordance with the standards set forth in Section
2.02(c) and is subject to periodic redetermination pursuant to Section 2.02(b)
and periodic reduction pursuant to Section 2.02(b)(v).
(b) Calculation of Borrowing Base.
(i) The Borrower shall deliver to the Administrative Agent and each of
the Lenders on or before each June 1, September 1, and December 1, beginning
September 1, 2002, an Internal Engineering Report dated effective as of the
immediately preceding April 1, July 1 or October 1, respectively, and such other
information as may be reasonably requested by any Lender with respect to the Oil
and Gas Properties included or to be included in the Borrowing Base. Within 30
days after the Administrative Agent and the Lenders' receipt of such Internal
Engineering Report and other information, the Administrative Agent shall deliver
to each Lender the Administrative Agent's recommendation for the redetermined
Borrowing Base. Within 15 days after the Lenders' receipt of the Administrative
Agent's recommendation, the Administrative Agent and the Majority Lenders shall
redetermine the Borrowing Base in accordance with Section 2.02(c) (except that
any increase in the Borrowing Base shall require the consent of all Lenders),
and the Administrative Agent shall notify the Borrower promptly in writing of
the amount of the Borrowing Base as so redetermined.
(ii) The Borrower shall deliver to the Administrative Agent and each
Lender on or before each March 15, beginning March 15, 2003, an Independent
Engineering Report dated effective as of the immediately preceding January 1,
and such other information as may be reasonably requested by the Administrative
Agent or any Lender with respect to the Oil and Gas Properties included or to be
included in the Borrowing Base. Within 30 days after the Administrative Agent
and the Lenders' receipt of such Independent Engineering Report and other
information, the Administrative Agent shall deliver to each Lender the
Administrative Agent's recommendation for the redetermined Borrowing Base.
Within 15 days after the Lenders' receipt of the Administrative Agent's
recommendation, the Administrative Agent and the Majority Lenders shall
redetermine the Borrowing Base in accordance with Section 2.02(c) (except that
any increase in the Borrowing Base shall require the consent of all Lenders),
and the Administrative Agent shall promptly notify the Borrower in writing of
the amount of the Borrowing Base as so redetermined.
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(iii) In the event that the Borrower does not furnish to the
Administrative Agent and the Lenders the Independent Engineering Report,
Internal Engineering Report or other information specified in clauses (i) or
(ii) above by the date specified therein, the Administrative Agent and the
Lenders may nonetheless redetermine the Borrowing Base and redesignate the
Borrowing Base from time-to-time thereafter in their sole discretion until the
Administrative Agent and the Lenders receive the relevant Independent
Engineering Report, Internal Engineering Report, or other information, as
applicable, whereupon the Administrative Agent and the Lenders shall redetermine
the Borrowing Base as otherwise specified in this Section 2.02.
(iv) Each delivery of an Engineering Report by the Borrower to the
Administrative Agent and the Lenders shall constitute a representation and
warranty by the Borrower to the Administrative Agent and the Lenders that (A)
the Borrower and its relevant Subsidiaries owns the Oil and Gas Properties
specified therein free and clear of any Liens (except Permitted Liens), and (B)
on and as of the date of such Engineering Report, each Oil and Gas Property
described as "proved developed" therein was developed for oil and gas, and the
▇▇▇▇▇ pertaining to such Oil and Gas Properties that are described therein as
producing ▇▇▇▇▇ ("▇▇▇▇▇") were each producing oil and gas in paying quantities,
except for ▇▇▇▇▇ that were utilized as water or gas injection ▇▇▇▇▇ or as water
disposal ▇▇▇▇▇.
(v) The Borrowing Base, as established by the procedures set forth in
this Section 2.02 and as such Borrowing Base may be redetermined periodically,
shall automatically and permanently reduce in equal amounts on a monthly basis
on the first day of each calendar month commencing with, unless the parties
otherwise agree, the calendar month immediately following each redetermination.
Concurrent with each redetermination, the Agent and the Lenders shall establish
the amount of the monthly Borrowing Base reduction that shall apply until the
next redetermination. The initial monthly Borrowing Base reduction amount shall
be equal to $2,000,000 and shall commence on September 1, 2002. Schedule
2.02(b)(v) attached hereto sets forth, on a month by month basis, the monthly
Borrowing Base reduction amount for each month and the resulting then effective
Borrowing Base for the period from the date hereof until the next scheduled
redetermination of the Borrowing Base. Schedule 2.02(b)(v) shall be amended, and
a revised Schedule 2.02(b)(v) shall be distributed by the Administrative Agent
to the Borrower and each Lender, upon any redetermination (whether scheduled or
unscheduled) of the Borrowing Base or the monthly Borrowing Base reduction
amount that necessitates a revised Schedule 2.02(b)(v).
(vi) Interim Redetermination. In addition to the Borrowing Base
redeterminations provided for in Section 2.02(b), the Administrative Agent and
the Majority Lenders (except that any increase in the Borrowing Base shall
require the consent of all Lenders) may, either in their sole discretion or at
the request of the Borrower and based on such information as the Administrative
Agent and the Lenders deem relevant (but in accordance with Section 2.02(c)),
make one additional redetermination of the Borrowing Base during any six-month
period. The party requesting the redetermination shall give the other party at
least 10 days' prior written notice that a redetermination of the Borrowing Base
pursuant to this Section 2.02(b)(vi) is to be performed. In connection with any
redetermination of the Borrowing Base under this Section 2.02(b)(vi), the
Borrower shall provide the Administrative Agent and the Lenders with such
information regarding the Borrower's and its Subsidiaries' (other than Foreign
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Subsidiaries') business (including their respective Oil and Gas Properties, the
Proven Reserves and production relating thereto) as the Administrative Agent or
any Lender may request, including in the case of requests for an increase to the
Borrowing Base of $1,000,000.00 or more, an updated Independent Engineering
Report. Concurrent with each redetermination, the Agent and the Lenders shall
establish the amount of the monthly Borrowing Base reduction that shall apply
until the next redetermination. The Administrative Agent shall notify the
Borrower in writing of each redetermination of the Borrowing Base pursuant to
this Section 2.02(b)(vi) and, if necessary, a revised Schedule 2.02(b)(v) shall
be distributed by the Administrative Agent to the Borrower and each Lender,
reflecting the revised Borrowing Base and the monthly Borrowing Base reduction
amount.
(c) Standards for Redetermination. Each redetermination of the Borrowing
Base and the monthly Borrowing Base reduction amount by the Administrative Agent
and the Lenders pursuant to this Section 2.02 shall be made (i) in the sole
discretion of the Administrative Agent and the Lenders (but in accordance with
the other provisions of this Section 2.02(c)), (ii) in accordance with the
Administrative Agent's and the Lenders' customary internal standards and
practices for valuing and redetermining the value of Oil and Gas Properties in
connection with reserve based oil and gas loan transactions, (iii) in
conjunction with the most recent Independent Engineering Report or Internal
Engineering Report, as applicable, or other information received by the
Administrative Agent and the Lenders relating to the Proven Reserves of the
Borrower and its relevant Subsidiaries, and (iv) based upon the estimated value
of the Proven Reserves owned by the Borrower and its relevant Subsidiaries as
determined by the Administrative Agent and the Lenders. In valuing and
redetermining the Borrowing Base, the Administrative Agent and the Lenders may
also consider the business, financial condition, and Debt obligations of the
Borrower and its relevant Subsidiaries and such other factors as the
Administrative Agent and the Lenders customarily deem appropriate. In that
regard, the Borrower acknowledges that the determination of the Borrowing Base
contains an equity cushion (market value in excess of loan value), which is
essential for the adequate protection of the Administrative Agent and the
Lenders. No Proven Reserves shall be included or considered for inclusion in the
Borrowing Base unless the Administrative Agent and the Lenders shall have
received, at the Borrower's expense, evidence of title satisfactory in form and
substance to the Administrative Agent that the Administrative Agent has an
Acceptable Security Interest in the Oil and Gas Properties relating thereto
pursuant to the Security Instruments. At all times after the Administrative
Agent has given the Borrower notification of a redetermination of the Borrowing
Base under this Section 2.02, the Borrowing Base shall be equal to the
redetermined amount or such lesser amount designated by the Borrower and
disclosed in writing to the Administrative Agent and the Lenders until the
Borrowing Base is subsequently redetermined in accordance with this Section
2.02.
Section 2.03 Method of Borrowing.
(a) Notice. Each Borrowing shall be made pursuant to a Notice of Borrowing
(or by telephone notice promptly confirmed in writing by a Notice of Borrowing),
given not later than 10:00 a.m. (Dallas, Texas time) (i) on the third Business
Day before the date of the proposed Borrowing, in the case of a Eurodollar Rate
Borrowing or (ii) on the Business Day of the proposed Borrowing, in the case of
a Reference Rate Borrowing, by the Borrower to the Administrative Agent, which
shall in turn give to each Lender prompt notice of such proposed Borrowing by
telecopier or telex. Each Notice of a Borrowing shall be given by telecopier or
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telex, confirmed immediately in writing, specifying the information required
therein. In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Administrative Agent shall notify each Lender promptly of the
applicable interest rate under Section 2.09(b). Each Lender shall, before noon
(Dallas, Texas time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at its
address referred to in Section 9.02, or such other location as the
Administrative Agent may specify by notice to the Lenders, in same day funds, in
the case of a Borrowing, such Lender's Pro Rata Share of such Borrowing. After
the Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent shall
make such funds available to the Borrower at its account with the Administrative
Agent.
(b) Conversions and Continuations. The Borrower may elect to Convert or
continue any Borrowing under this Section 2.03 by delivering an irrevocable
Notice of Conversion or Continuation to the Administrative Agent at the
Administrative Agent's office no later than 10:00 a.m. (Dallas, Texas time) (i)
on the date which is at least three Business Days in advance of the proposed
Conversion or continuation date in the case of a Conversion to or a continuation
of a Borrowing comprised of Eurodollar Rate Advances and (ii) on the Business
Day of the proposed Conversion in the case of a Conversion to a Borrowing
comprised of Reference Rate Advances. Each such Notice of Conversion or
Continuation shall be in writing or by telex or telecopier confirmed immediately
in writing specifying the information required therein. Promptly after receipt
of a Notice of Conversion or Continuation under this Section, the Administrative
Agent shall provide each Lender with a copy thereof and, in the case of a
Conversion to or a Continuation of a Borrowing comprised of Eurodollar Rate
Advances, notify each Lender of the applicable interest rate under Section
2.09(b).
(c) Certain Limitations. Notwithstanding anything to the contrary in
paragraphs (a) and (b) above:
(i) at no time shall there be more than six Interest Periods
applicable to outstanding Eurodollar Rate Advances and the Borrower may not
select Eurodollar Rate Advances for any Borrowing at any time that a Default has
occurred and is continuing;
(ii) if any Lender shall, at least one Business Day before the date of
any requested Borrowing, Conversion, or continuation, notify the Administrative
Agent that the introduction of or any change in or in the interpretation of any
law or regulation makes it unlawful, or that any central bank or other
Governmental Authority asserts that it is unlawful, for such Lender or its
Eurodollar Lending Office to perform its obligations under this Agreement to
make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances,
the right of the Borrower to select Eurodollar Rate Advances from such Lender
shall be suspended until such Lender shall notify the Administrative Agent that
the circumstances causing such suspension no longer exist, and the Advance made
by such Lender in respect of such Borrowing, Conversion, or continuation shall
be a Reference Rate Advance;
(iii) if the Administrative Agent is unable to determine the
Eurodollar Rate for Eurodollar Rate Advances comprising any requested Borrowing,
the right of the Borrower to select Eurodollar Rate Advances for such Borrowing
or for any subsequent Borrowing shall be suspended until the Administrative
Agent shall notify the Borrower and the Lenders that the
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circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Reference Rate Advance;
(iv) if the Majority Lenders shall, at least one Business Day before
the date of any requested Borrowing, notify the Administrative Agent that the
Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing will not
adequately reflect the cost to such Lenders of making or funding their
respective Eurodollar Rate Advances, as the case may be, for such Borrowing, the
right of the Borrower to select Eurodollar Rate Advances for such Borrowing or
for any subsequent Borrowing shall be suspended until the Administrative Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist, and each Advance comprising such Borrowing shall be
a Reference Rate Advance; and
(v) if the Borrower shall fail to select the duration or continuation
of any Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01 and
paragraph (b) above, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders and such Advances shall be made available to the
Borrower on the date of such Borrowing as Reference Rate Advances or, if an
existing Advance, Converted into Reference Rate Advances.
(d) Notices Irrevocable. Each Notice of Borrowing and Notice of Conversion
or Continuation shall be irrevocable and binding on the Borrower. In the case of
any Borrowing for which the related Notice of Borrowing specifies the Borrowing
is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify
each Lender against any loss, out-of-pocket cost, or expense incurred by such
Lender as a result of any failure by the Borrower to fulfill on or before the
date specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III including any loss (including any loss of
anticipated profits), cost, or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date.
(e) Administrative Agent Reliance. Unless the Administrative Agent shall
have received notice from a Lender before the date of any Borrowing that such
Lender shall not make available to the Administrative Agent such Lender's Pro
Rata Share of a Borrowing, the Administrative Agent may assume that such Lender
has made its Pro Rata Share of such Borrowing available to the Administrative
Agent on the date of such Borrowing in accordance with paragraph (a) of this
Section 2.03 and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made its Pro Rata Share of such
Borrowing available to the Administrative Agent, such Lender and the Borrower
severally agree to immediately repay to the Administrative Agent on demand such
corresponding amount, together with interest on such amount, for each day from
the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable on such day to Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for such
day. If such Lender shall repay to the Administrative Agent such corresponding
amount and interest as provided above, such corresponding amount so repaid shall
constitute such Lender's Advance as part of such Borrowing for purposes of this
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Agreement even though not made on the same day as the other Advances comprising
such Borrowing.
(f) Lender Obligations Several. The failure of any Lender to make the
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, to make its Advance on the date of such
Borrowing. No Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the date of any Borrowing.
Section 2.04 Reduction of the Commitments.
(a) The Borrower shall have the right, upon at least three Business Days'
irrevocable notice to the Administrative Agent, to terminate in whole or reduce
ratably in part the unused portion of the Commitments; provided that each
partial reduction shall be in the aggregate amount of $1,000,000 or in integral
multiples of $1,000,000 in excess thereof.
(b) Any reduction and termination of the Commitments pursuant to this
Section 2.04 shall be applied ratably to each Lender's Commitment and shall be
permanent, with no obligation of the Lenders to reinstate such Commitments.
Section 2.05 Prepayment of Advances.
(a) Optional. The Borrower may prepay the Advances, after giving by 10:00
a.m. (Dallas, Texas time) (i) in the case of Eurodollar Rate Advances, at least
three Business Days' or (ii) in the case of Reference Rate Advances, same
Business Day's, irrevocable prior written notice to the Administrative Agent
stating the proposed date and aggregate principal amount of such prepayment. If
any such notice is given, the Borrower shall prepay the Advances in whole or
ratably in part in an aggregate principal amount equal to the amount specified
in such notice, together with accrued interest to the date of such prepayment on
the principal amount prepaid and amounts, if any, required to be paid pursuant
to Section 2.12 as a result of such prepayment being made on such date;
provided, however, that each partial prepayment with respect to: (A) any
Eurodollar Rate Advances shall be applied to Eurodollar Rate Advances comprising
part of the same Borrowing; (B) any Reference Rate Advances shall be made in
minimum amounts of $500,000 and in integral multiples of $100,000 in excess
thereof, and (C) any Borrowing comprised of Eurodollar Rate Advances shall be
made in $1,000,000 and in integral multiples of $1,000,000 in excess thereof and
in an aggregate principal amount such that after giving effect thereto such
Borrowing shall have a principal amount outstanding of at least $1,000,000. Full
prepayments of any Borrowing are permitted without restriction of amounts.
(b) Borrowing Base Deficiency. If the aggregate outstanding amount of the
Advances plus the Letter of Credit Exposure ever exceeds the lesser of the
Borrowing Base and the aggregate Commitments, the Borrower shall, after receipt
of written notice from the Administrative Agent regarding such deficiency,
deliver to the Administrative Agent, within 10 days of receipt of such notice
from the Administrative Agent, a written response indicating which of the
following actions it intends to take to remedy the Borrowing Base deficiency
(and the failure of the Borrower to deliver such election notice or to perform
the action chosen to remedy such Borrowing Base deficiency shall constitute an
Event of Default):
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(i) prepay Advances or, if the Advances have been repaid in full, make
deposits into the Cash Collateral Account to provide cash collateral for the
Letter of Credit Exposure, such that the Borrowing Base deficiency is cured
within 10 days after the date such deficiency notice is received by the Borrower
from the Administrative Agent;
(ii) pledge as Collateral for the Obligations additional Oil and Gas
Properties acceptable to the Administrative Agent and each of Lenders such that
the Borrowing Base deficiency is cured within 30 days after the date such
deficiency notice is received by the Borrower from the Administrative Agent; or
(iii) (A) deliver, within 10 days after the date such deficiency
notice is received by the Borrower, to the Administrative Agent written notice
indicating the Borrower's election to repay the Advances and make deposits into
the Cash Collateral Account to provide cash collateral for the Letters of
Credit, each in six monthly installments equal to one-sixth of such Borrowing
Base deficiency with the first such installment due 30 days after the date such
deficiency notice is received by the Borrower from the Administrative Agent and
each following installment due 30 days after the preceding installment, and (B)
make such payments and deposits within such time periods.
Each prepayment pursuant to this Section 2.05(b) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.12 as a result of such prepayment
being made on such date. Each prepayment under clauses (i) and (iii) of this
Section 2.05(b) shall be applied first to the payment of outstanding Reference
Rate Advances, if any, and then to the payment of all other Advances as
determined by the Administrative Agent and agreed to by the Lenders in their
sole discretion.
(c) Reduction of Commitments. On the date of each reduction of the
aggregate Commitments pursuant to Section 2.04, the Borrower agrees to make a
prepayment in respect of the outstanding amount of the Advances to the extent,
if any, that the aggregate unpaid principal amount of all Advances plus the
Letter of Credit Exposure exceeds the lesser of (A) the aggregate Commitments,
as so reduced and (B) the Borrowing Base. Each prepayment pursuant to this
Section 2.05(c) shall be accompanied by accrued interest on the amount prepaid
to the date of such prepayment and amounts, if any, required to be paid pursuant
to Section 2.12 as a result of such prepayment being made on such date.
(d) Illegality. If any Lender shall notify the Administrative Agent and the
Borrower that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central bank or other
Governmental Authority asserts that it is unlawful for such Lender or its
Eurodollar Lending Office to perform its obligations under this Agreement to
maintain any Eurodollar Rate Advances of such Lender then outstanding hereunder,
(i) the Borrower shall, no later than 10:00 a.m. (Dallas, Texas time) (A) if not
prohibited by law, on the last day of the Interest Period for each outstanding
Eurodollar Rate Advance made by such Lender or (B) if required by such notice,
on the second Business Day following its receipt of such notice prepay all of
the Eurodollar Rate Advances made by such Lender then outstanding, together with
accrued interest on the principal amount prepaid to the date of such prepayment
and amounts, if any, required to be paid pursuant to Section 2.12 as a result of
such prepayment being made on such date, (ii) such Lender shall simultaneously
make a Reference Rate Advance
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to the Borrower on such date in an amount equal to the aggregate principal
amount of the Eurodollar Rate Advances prepaid to such Lender, and (iii) the
right of the Borrower to select Eurodollar Rate Advances from such Lender for
any subsequent Borrowing shall be suspended until such Lender gives notice
referred to above shall notify the Administrative Agent that the circumstances
causing such suspension no longer exist.
(e) No Additional Right; Ratable Prepayment. The Borrower shall have no
right to prepay any principal amount of any Advance except as provided in this
Section 2.05, and all notices given pursuant to this Section 2.05 shall be
irrevocable and binding upon the Borrower. Each payment of any Advance pursuant
to this Section 2.05 shall be made in a manner such that all Advances comprising
part of the same Borrowing are paid in whole or ratably in part.
Section 2.06 Repayment of Advances. The Borrower shall repay to the
Administrative Agent for the ratable benefit of the Lenders the outstanding
principal amount of each Advance, together with any accrued interest, on the
Maturity Date or such earlier date pursuant to Section 7.02 or Section 7.03.
Section 2.07 Letters of Credit.
(a) Commitment. From time to time from the date of this Agreement until 30
days prior to the Commitment Termination Date, at the request of the Borrower,
the Issuing Lender shall, on the terms and conditions hereinafter set forth,
issue, increase, or extend the Expiration Date of, Letters of Credit for the
account of the Borrower on any Business Day. No Letter of Credit will be issued,
increased, or extended:
(i) if such issuance, increase, or extension would cause the Letter of
Credit Exposure to exceed the lesser of (A) $10,000,000.00 or (B) the lesser of
(I) the aggregate Commitments less the aggregate outstanding principal amount of
all Advances and (II) the Borrowing Base less the aggregate outstanding
principal amount of all Advances;
(ii) if such Letter of Credit has an Expiration Date later than the
earlier of (A) one year after the date of issuance thereof (or, if extendable
beyond such period, unless such Letter of Credit is cancelable upon at least 30
days' notice given by the Issuing Lender to the beneficiary of such Letter of
Credit) and (B) the Commitment Termination Date;
(iii) unless such Letter of Credit Documents are in form and substance
acceptable to the Issuing Lender in its sole discretion;
(iv) unless such Letter of Credit is a standby letter of credit not
supporting the repayment of indebtedness for borrowed money of any Person;
(v) unless the Borrower has delivered to the Issuing Lender a
completed and executed Letter of Credit Application; and
(vi) unless such Letter of Credit is governed by the Uniform Customs
and Practices for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor to such publication. If the terms
of any Letter of Credit
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Application referred to in the foregoing clause (v) conflicts with the terms of
this Agreement, the terms of this Agreement shall control.
(b) Participations. Upon the date of the issuance or increase of a Letter
of Credit, the Issuing Lender shall be deemed to have sold to each other Lender
having a Commitment, and each other Lender having a Commitment shall have been
deemed to have purchased from the Issuing Lender, a participation in the related
Letter of Credit Obligations equal to such Lender's Pro Rata Share at such date
and such sale and purchase shall otherwise be in accordance with the terms of
this Agreement. The Issuing Lender shall notify each such participant Lender
having a Commitment promptly by telex, telephone, or telecopy of each Letter of
Credit issued, increased, or extended or converted and the actual dollar amount
of such Lender's participation in such Letter of Credit.
(c) Issuing. Each Letter of Credit shall be issued, increased, or extended
pursuant to a Letter of Credit Application (or by telephone notice promptly
confirmed in writing by a Letter of Credit Application), given not later than
10:00 a.m. (Dallas, Texas time) on the fifth Business Day before the date of the
proposed issuance, increase, or extension of the Letter of Credit, and the
Administrative Agent shall give to each Lender prompt notice thereof by telex,
telephone, or telecopy. Each Letter of Credit Application shall be given by
telecopier or telex, confirmed immediately in writing, specifying the
information required therein. After the Administrative Agent's receipt of such
Letter of Credit Application and upon the Borrower's fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent shall
issue, increase, or extend such Letter of Credit for the account of the
Borrower. Each Letter of Credit Application shall be irrevocable and binding on
the Borrower.
(d) Reimbursement. The Borrower hereby agrees to pay to the Issuing Lender
on demand an amount equal to any amount paid by the Issuing Lender under any
Letter of Credit. In the event the Issuing Lender makes a payment pursuant to a
request for draw presented under a Letter of Credit and such payment is not
reimbursed promptly by the Borrower upon demand, the Issuing Lender shall give
the Administrative Agent notice of the Borrower's failure to make such
reimbursement and the Administrative Agent shall notify each Lender having a
Commitment promptly of the amount necessary to reimburse the Issuing Lender.
Upon such notice from the Administrative Agent, each Lender having a Commitment
shall reimburse the Issuing Lender promptly for such Lender's Pro Rata Share of
such amount, and such reimbursement shall be deemed for all purposes of this
Agreement to be an Advance to the Borrower transferred at the Borrower's request
to the Issuing Lender. If such reimbursement is not made by any Lender to the
Issuing Lender on the same day on which the Administrative Agent notifies such
Lender to make reimbursement to the Issuing Lender hereunder, such Lender shall
pay interest on its Pro Rata Share thereof to the Issuing Lender at a rate per
annum equal to the Federal Funds Rate. Subject to the rights of the Borrower
under Section 2.03(b), the Borrower hereby unconditionally and irrevocably
authorizes, empowers, and directs the Administrative Agent and the Lenders to
record and otherwise treat such reimbursements to the Issuing Lender as
Reference Rate Advances under a Borrowing requested by the Borrower to reimburse
the Issuing Lender which have been transferred to the Issuing Lender at the
Borrower's request.
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(e) Obligations Unconditional. The obligations of the Borrower under this
Agreement in respect of each Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit
Document;
(ii) any amendment or waiver of, or any consent to or departure from,
any Letter of Credit Document;
(iii) the existence of any claim, set-off, defense, or other right
which the Borrower may have at any time against any beneficiary or transferee of
such Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Issuing Lender, or any other Person, whether in
connection with this Agreement, the transactions contemplated in this Agreement
or in any Letter of Credit Document, or any unrelated transaction;
(iv) any statement or any other document presented under such Letter
of Credit proving to be forged, fraudulent, invalid, or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Lender under such Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing;
provided, however, that nothing contained in this paragraph (e) shall be deemed
to constitute a waiver of any remedies of the Borrower in connection with the
Letters of Credit or the Borrower's rights under Section 2.07(f) below.
(f) Liability of Issuing Lender. The Borrower assumes all risks of the acts
or omissions of any beneficiary or transferee of any Letter of Credit with
respect to its use of such Letter of Credit. Neither the Issuing Lender nor any
of its officers or directors shall be liable or responsible for:
(i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith;
(ii) the validity, sufficiency, or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent, or forged;
(iii) payment by the Issuing Lender against presentation of documents
which do not comply with the terms of a Letter of Credit, including failure of
any documents to bear any reference or adequate reference to the relevant Letter
of Credit; or
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(iv) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit (INCLUDING THE ISSUING LENDER'S OWN
NEGLIGENCE),
except that the Borrower shall have a claim against the Issuing Lender, and the
Issuing Lender shall be liable to the Borrower, to the extent of any direct, as
opposed to consequential, damages suffered by the Borrower which the Borrower
proves were caused by the Issuing Lender's willful misconduct or gross
negligence in determining whether documents presented under a Letter of Credit
comply with the terms of such Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Lender may accept documents that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
(g) Cash Collateral Account.
(i) If the Borrower is required to deposit funds in the Cash
Collateral Account pursuant to Sections 2.05(b), 7.02(b), or 7.03(b), then the
Borrower and the Issuing Lender shall establish the Cash Collateral Account and
the Borrower shall execute any documents and agreements, including the Issuing
Lender's standard form assignment of deposit accounts, that the Issuing Lender
requests in connection therewith to establish the Cash Collateral Account and
grant the Issuing Lender a first priority security interest in such account and
the funds therein. The Borrower hereby pledges to the Issuing Lender and grants
the Issuing Lender a security interest in the Cash Collateral Account, whenever
established, all funds held in the Cash Collateral Account from time to time,
and all proceeds thereof as security for the payment of the Obligations.
(ii) So long as no Default or Event of Default Exists, (A) the Issuing
Lender may apply the funds held in the Cash Collateral Account only to the
reimbursement of any Letter of Credit Obligations, and (B) the Issuing Lender
shall release to the Borrower at the Borrower's written request any funds held
in the Cash Collateral Account in an amount up to but not exceeding the excess,
if any (immediately prior to the release of any such funds), of the total amount
of funds held in the Cash Collateral Account over the Letter of Credit Exposure.
During the existence of any Default or Event of Default, the Issuing Lender may
apply any funds held in the Cash Collateral Account to the Obligations in any
order determined by the Issuing Lender, regardless of any Letter of Credit
Exposure which may remain outstanding; provided that, if the Issuing Lender
elects to apply such funds against the Advances, the Issuing Lender shall apply
the funds first to the payment of outstanding Reference Rate Advances, if any,
and then to the payment of all other Advances as determined by the Issuing
Lender and agreed to by the Lenders in their sole discretion. The Issuing Lender
may in its sole discretion at any time release to the Borrower any funds held in
the Cash Collateral Account.
(iii) The Issuing Lender shall exercise reasonable care in the custody
and preservation of any funds held in the Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Issuing Lender accords its own
property, it being understood that the Issuing Lender shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.
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Section 2.08 Fees.
(a) Commitment Fees.
(i) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee at a per annum rate of .50% on the
average daily amount by which (A) the lesser of (1) such Lender's Pro Rata Share
of the Borrowing Base and (2) such Lender's Commitment exceeds (B) the sum of
(1) such Lender's Pro Rata share of the aggregate outstanding Advances and (2)
such Lender's Pro Rata Share of the Letter of Credit Exposure, from the date of
this Agreement until the Commitment Termination Date.
(ii) The commitment fees shall be due and payable (A) quarterly in
arrears on the last day of each March, June, September, and December commencing
on September 30, 2002 and continuing thereafter through and including the end of
the calendar quarter preceding the Commitment Termination Date and (B) on the
Commitment Termination Date.
(b) Letter of Credit Fees. (i) The Borrower agrees to pay (A) to the
Administrative Agent, for the pro rata benefit of the Lenders, a per annum
letter of credit fee for each Letter of Credit issued hereunder in an amount
equal to the Applicable Margin for Eurodollar Rate Advances on the face amount
of such Letter of Credit and for the period such Letter of Credit is to be
outstanding, but with a minimum annual fee of $1,000.00 on each Letter of Credit
and (B) to the Issuing Lender, a fronting fee for each Letter of Credit equal to
the greater of (y) .25% of the face amount of such Letter of Credit and (z)
$1,000.00. Each such fee shall be payable annually in advance on the date of the
issuance, increase or extension of the Letter of Credit, and, in the case of an
increase or extension only, on the date of such increase or such extension. (ii)
The Borrower also agrees to pay to the Issuing Lender such other usual and
customary fees associated with any transfers, amendments, drawings, negotiations
or reissuances of any Letter of Credit.
(c) Facility and Other Fees. The Borrower agrees to pay to the
Administrative Agent the facility fees and the other fees as described in (i)
the letter dated July 31, 2002 between the Borrower and the Administrative
Agent, and (ii) the letter dated July 31, 2002 among the Borrower, the
Administrative Agent and Guaranty Bank, FSB.
(d) Borrowing Base Increase Fees. The Borrower agrees to pay to the
Administrative Agent for the account of the Lenders in connection with any
increase of the Borrowing Base which would result in the Borrowing Base being
greater than $62,000,000, a borrowing base increase fee on the amount of such
increase. The borrowing base increase fee shall be in an amount equal to .75%
multiplied by the amount of the increase and shall be due and payable on the
date that the increase to the Borrowing Base becomes effective.
Section 2.09 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance made by each Lender from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:
(a) Reference Rate Advances. If such Advance is a Reference Rate Advance, a
rate per annum equal at all times to the Adjusted Reference Rate in effect from
time to time plus the
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Applicable Margin in effect from time to time, payable monthly in arrears on the
last day of each month and on the date such Reference Rate Advance shall be paid
in full, provided that any amount of principal which is not paid when due
(whether at stated maturity, by acceleration, or otherwise) shall bear interest
from the date on which such amount is due until such amount is paid in full,
payable on demand, at a rate per annum equal at all times to the Adjusted
Reference Rate in effect from time to time plus the Applicable Margin plus 3.00%
per annum.
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance,
a rate per annum equal at all times during the Interest Period for such Advance
to the Eurodollar Rate for such Interest Period plus the Applicable Margin in
effect from time to time, payable on the last day of such Interest Period, and,
in the case of six-month Interest Periods, on the day which occurs during such
Interest Period three months from the first day of such Interest Period,
provided that any amount of principal which is not paid when due (whether at
stated maturity, by acceleration, or otherwise) shall bear interest from the
date on which such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the Adjusted Reference Rate in
effect from time to time plus the Applicable Margin plus 3.00% per annum.
(c) Additional Interest on Eurodollar Rate Advances. The Borrower shall pay
to each Lender, so long as any such Lender shall be required under regulations
of the Federal Reserve Board to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional interest
on the unpaid principal amount of each Eurodollar Rate Advance of such Lender,
from the effective date of such Advance until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder obtained
by subtracting (i) the Eurodollar Rate for the Interest Period for such Advance
from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for
such Interest Period, payable on each date on which interest is payable on such
Advance. Such additional interest payable to any Lender shall be determined by
such Lender and notified to the Borrower through the Administrative Agent (such
notice to include the calculation of such additional interest, which calculation
shall be conclusive in the absence of manifest error).
(d) Usury Recapture.
(i) If, with respect to any Lender, the effective rate of interest
contracted for under the Loan Documents, including the stated rates of interest
and fees contracted for hereunder and any other amounts contracted for under the
Loan Documents which are deemed to be interest, at any time exceeds the Maximum
Rate, then the outstanding principal amount of the loans made by such Lender
hereunder shall bear interest at a rate which would make the effective rate of
interest for such Lender under the Loan Documents equal the Maximum Rate until
the difference between the amounts which would have been due at the stated rates
and the amounts which were due at the Maximum Rate (the "Lost Interest") has
been recaptured by such Lender.
(ii) If, when the loans made hereunder are repaid in full, the Lost
Interest has not been fully recaptured by such Lender pursuant to the preceding
paragraph, then, to the extent permitted by law, for the loans made hereunder by
such Lender, the interest rates charged under Section 2.09 hereunder shall be
retroactively increased such that the effective rate of interest
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under the Loan Documents was at the Maximum Rate since the effectiveness of this
Agreement to the extent necessary to recapture the Lost Interest not recaptured
pursuant to the preceding sentence and, to the extent allowed by law, the
Borrower shall pay to such Lender the amount of the Lost Interest remaining to
be recaptured by such Lender.
(iii) NOTWITHSTANDING THE FOREGOING OR ANY OTHER TERM IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT TO THE CONTRARY, IT IS THE INTENTION OF
EACH LENDER AND THE BORROWER TO CONFORM STRICTLY TO ANY APPLICABLE USURY LAWS.
ACCORDINGLY, IF ANY LENDER CONTRACTS FOR, CHARGES, OR RECEIVES ANY CONSIDERATION
WHICH CONSTITUTES INTEREST IN EXCESS OF THAT PAYABLE AT THE MAXIMUM RATE, THEN
ANY SUCH EXCESS SHALL BE CANCELED AUTOMATICALLY AND, IF PREVIOUSLY PAID, SHALL
AT SUCH LENDER'S OPTION BE APPLIED TO THE OUTSTANDING AMOUNT OF THE LOANS MADE
HEREUNDER BY SUCH LENDER OR BE REFUNDED TO THE BORROWER.
Section 2.10 Payments and Computations.
(a) Payment Procedures. The Borrower shall make each payment under this
Agreement and under the Notes in Dollars not later than 10:00 a.m. (Dallas,
Texas time) on the day when due to the Administrative Agent at the location
referred to in the Notes (or such other location as the Administrative Agent
shall designate in writing to the Borrower) in same day funds without deduction,
setoff, or counterclaim of any kind. The Administrative Agent shall thereafter
cause to be distributed promptly like funds relating to the payment of
principal, interest or fees ratably (other than amounts payable solely to the
Administrative Agent, the Issuing Lender, or a specific Lender pursuant to
Section 2.08(c), 2.09(c), 2.12, 2.13, 2.14, 8.05, or 9.07, but after taking into
account payments effected pursuant to Section 9.04), in accordance with each
Lender's Pro Rata Share, to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender or the Issuing Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.
(b) Computations. All computations of interest based on the Reference Rate
and of fees shall be made by the Administrative Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Eurodollar Rate and the Federal Funds Rate shall be made by the
Administrative Agent, on the basis of a year of 360 days, in each case for the
actual number of days (including the first day, but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate or fee shall be
conclusive and binding for all purposes, absent manifest error.
(c) Non-Business Day Payments. Whenever any payment shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause
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payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(d) Administrative Agent Reliance. Unless the Administrative Agent shall
have received written notice from the Borrower prior to the date on which any
payment is due to the Lenders that the Borrower shall not make such payment in
full, the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such date an amount equal to the amount then due such Lender. If and
to the extent the Borrower shall not have so made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender, together with
interest, for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Administrative Agent, at
the Federal Funds Rate for such day.
Section 2.11 Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances or Letter of Credit
Obligations made by it in excess of its Pro Rata Share of payments on account of
the Advances or Letter of Credit Obligations obtained by all the Lenders, such
Lender shall notify the Administrative Agent and forthwith purchase from the
other Lenders such participations in the Advances made by them or Letter of
Credit Obligations held by them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such Lender's ratable share (according to the proportion of (a) the
amount of the participation sold by such Lender to the purchasing Lender as a
result of such excess payment to (b) the total amount of such excess payment) of
such recovery, together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to the purchasing Lender to (ii) the total amount of all such required
repayments to the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.11 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
Section 2.12 Breakage Costs. If (a) any payment of principal of any
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such Advance, whether as a result of any payment pursuant to Section
2.05, the acceleration of the maturity of the Notes pursuant to Article VII, or
otherwise, or (b) the Borrower fails to make a principal or interest payment
with respect to any Eurodollar Rate Advance on the date such payment is due and
payable, the Borrower shall, within 10 days of any written demand sent by any
Lender to the Borrower through the Administrative Agent, pay to the
Administrative Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, out-of-pocket costs or
expenses which it may reasonably incur as a result of such payment or
nonpayment, including any loss (including loss of anticipated profits), cost or
expense incurred
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by reason of the liquidation or reemployment of deposits or other funds acquired
by any Lender to fund or maintain such Advance.
Section 2.13 Increased Costs.
(a) Eurodollar Rate Advances. If, due to either (i) the introduction of or
any change (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding, or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Administrative Agent),
immediately pay to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost.
A certificate as to the amount of such increased cost and detailing the
calculation of such cost submitted to the Borrower and the Administrative Agent
by such Lender shall be conclusive and binding for all purposes, absent manifest
error. Each Lender will notify the Administrative Agent and the Borrower of any
event occurring after the date of this Agreement which will entitle such Lender
to compensation pursuant to this Section 2.13(a) as promptly as practicable
after it obtains knowledge thereof and determines to request such compensation,
and will designate a different Applicable Lending Office for the Advances of
such Lender affected by such event if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the sole opinion of
such Lender, be disadvantageous to such Lender, provided that (i) such Lender
shall have no obligation to so designate an Applicable Lending Office located in
the United States, and (ii) the failure to provide such notice or certificate
shall not release or diminish or otherwise affect in any way the Borrower's
obligation to pay such increased costs.
(b) Capital Adequacy. If any Lender or the Issuing Lender determines in
good faith that compliance with any law or regulation or any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by such Lender or the Issuing Lender or any
corporation controlling such Lender or the Issuing Lender and that the amount of
such capital is increased by or based upon the existence of such Lender's
commitment to lend or the Issuing Lender's commitment to issue the Letters of
Credit and other commitments of this type, then, upon 30 days' prior written
notice by such Lender or the Issuing Lender (with a copy of any such demand to
the Administrative Agent), the Borrower shall immediately pay to the
Administrative Agent for the account of such Lender or to the Issuing Lender, as
the case may be, from time to time as specified by such Lender or the Issuing
Lender, additional amounts sufficient to compensate such Lender or the Issuing
Lender, in light of such circumstances, (i) with respect to such Lender, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's commitment to lend under this
Agreement and (ii) with respect to the Issuing Lender, to the extent that the
Issuing Lender reasonably determines such increase in capital to be allocable to
the issuance or maintenance of the Letters of Credit. A certificate as to such
amounts and detailing the calculation of such amounts submitted to the Borrower
by such Lender or the Issuing Lender shall be conclusive and binding for all
purposes, absent manifest error. Each Lender or the Issuing Lender (as the case
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may be) will notify the Borrower that it is entitled to compensation pursuant to
this Section 2.13(b) as promptly as practicable after it determines to request
such compensation; provided that the failure to provide such notice or
certificate shall not release or diminish or otherwise affect in any way the
Borrower's obligation to pay such additional amounts.
(c) Letters of Credit. If any change in any law or regulation or in the
interpretation thereof by any court or administrative or Governmental Authority
charged with the administration thereof shall either (i) impose, modify, or deem
applicable any reserve, special deposit, or similar requirement against letters
of credit issued by, or assets held by, or deposits in or for the account of,
the Issuing Lender or (ii) impose on the Issuing Lender any other condition
regarding the provisions of this Agreement relating to the Letters of Credit or
any Letter of Credit Obligations, and the result of any event referred to in the
preceding clause (i) or (ii) shall be to increase the cost to the Issuing Lender
of issuing or maintaining any Letter of Credit (which increase in cost shall be
determined by the Issuing Lender's reasonable allocation of the aggregate of
such cost increases resulting from such event), then, upon demand by the Issuing
Lender, the Borrower shall pay to the Issuing Lender, from time to time as
specified by the Issuing Lender, additional amounts which shall be sufficient to
compensate the Issuing Lender for such increased cost. A certificate as to such
increased cost incurred by the Issuing Lender, as a result of any event
mentioned in clause (i) or (ii) above, and detailing the calculation of such
increased costs submitted by the Issuing Lender to the Borrower, shall be
conclusive and binding for all purposes, absent manifest error.
Section 2.14 Taxes.
(a) No Deduction for Certain Taxes. Any and all payments by the Borrower
shall be made, in accordance with Section 2.10, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender, the Issuing Lender, and the Administrative Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender, the Issuing Lender, or the Administrative
Agent (as the case may be) is organized or any political subdivision of such
jurisdiction (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes") and, in
the case of each Lender and the Issuing Lender, Taxes by the jurisdiction of
such Lender's Applicable Lending Office or any political subdivision of such
jurisdiction. If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable to any Lender, the Issuing Lender, or the
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that, after making all required deductions (including deductions applicable
to additional sums payable under this Section 2.14), such Lender, the Issuing
Lender, or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made;
provided, however, that if the Borrower's obligation to deduct or withhold Taxes
is caused solely by such Lender's, the Issuing Lender's, or the Administrative
Agent's failure to provide the forms described in paragraph (d) of this Section
2.14 and such Lender, the Issuing Lender, or the Administrative Agent could have
provided such forms, no such increase shall be required; (ii) the Borrower shall
make such deductions; and (iii) the Borrower shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
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(b) Other Taxes. In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Notes, or the other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Indemnification. THE BORROWER INDEMNIFIES EACH LENDER, THE ISSUING
LENDER, AND THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES
(INCLUDING ANY TAXES OR OTHER TAXES IMPOSED BY ANY JURISDICTION ON AMOUNTS
PAYABLE UNDER THIS SECTION 2.14) PAID BY SUCH LENDER, THE ISSUING LENDER, OR THE
ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING INTEREST
AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH
TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED. EACH PAYMENT REQUIRED
TO BE MADE BY THE BORROWER IN RESPECT OF THIS INDEMNIFICATION SHALL BE MADE TO
THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF ANY PARTY CLAIMING SUCH
INDEMNIFICATION WITHIN 30 DAYS FROM THE DATE THE BORROWER RECEIVES WRITTEN
DEMAND THEREFOR FROM THE ADMINISTRATIVE AGENT ON BEHALF OF ITSELF AS
ADMINISTRATIVE AGENT, THE ISSUING LENDER, OR ANY SUCH LENDER. IF ANY LENDER, THE
ADMINISTRATIVE AGENT, OR THE ISSUING LENDER RECEIVES A REFUND IN RESPECT OF ANY
TAXES PAID BY THE BORROWER UNDER THIS PARAGRAPH (C), SUCH LENDER, THE
ADMINISTRATIVE AGENT, OR THE ISSUING LENDER, AS THE CASE MAY BE, SHALL PROMPTLY
PAY TO THE BORROWER THE BORROWER'S SHARE OF SUCH REFUND.
(d) Foreign Lender Withholding Exemption. Each Lender and Issuing Lender
that is not incorporated under the laws of the United States of America or a
state thereof agrees that it shall deliver to the Borrower and the
Administrative Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, certifying in each case that such Lender is entitled to receive payments
under this Agreement and the Notes payable to it, without deduction or
withholding of any United States federal income taxes, (ii) if applicable, an
Internal Revenue Service Form W-8 or W-9 or successor applicable form, as the
case may be, to establish an exemption from United States backup withholding
tax, and (iii) any other governmental forms which are necessary or required
under an applicable tax treaty or otherwise by law to reduce or eliminate any
withholding tax, which have been reasonably requested by the Borrower. Each
Lender which delivers to the Borrower and the Administrative Agent a Form 1001
or 4224 and Form W-8 or W-9 pursuant to the next preceding sentence further
undertakes to deliver to the Borrower and the Administrative Agent two further
copies of the said letter and Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, or other manner of certification, as the case may
be, on or before the date that any such letter or form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent letter and form previously delivered by it to the Borrower and the
Administrative Agent, and such extensions or renewals thereof as may reasonably
be requested by the Borrower and the Administrative Agent certifying in the case
of a Form 1001 or 4224 that such Lender is entitled to receive payments under
this Agreement without deduction or
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withholding of any United States federal income taxes. If an event (including
any change in treaty, law or regulation) has occurred prior to the date on which
any delivery required by the preceding sentence would otherwise be required
which renders all such forms inapplicable or which would prevent any Lender from
duly completing and delivering any such letter or form with respect to it and
such Lender advises the Borrower and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax, such Lender shall not be
required to deliver such letter or forms. The Borrower shall withhold tax at the
rate and in the manner required by the laws of the United States with respect to
payments made to a Lender failing to timely provide the requisite Internal
Revenue Service forms.
Section 2.15 Replacement Lenders
(a) If any Lender has notified the Borrower and the Administrative Agent of
its incurring the increased costs as described under Section 2.13(a) or has
required the Borrower to make payments for Taxes under Section 2.14, then the
Borrower may, unless such Lender has notified the Borrower and the
Administrative Agent that the circumstances giving rise to such notice no longer
apply, terminate, in whole but not in part, the Commitment of such Lender (other
than the Administrative Agent) (the "Terminated Lender") at any time upon five
(5) Business Days' prior written notice to the Terminated Lender and the
Administrative Agent (such notice referred to herein as a "Notice of
Termination").
(b) In order to effect the termination of the Commitment of the Terminated
Lender, the Borrower shall: (i) obtain an agreement with one or more Lenders to
increase their Commitment or Commitments and/or (ii) request any one or more
other banking institutions to become parties to this Agreement in place and
instead of such Terminated Lender and agree to accept a Commitment or
Commitments; provided, however, that such one or more other banking institutions
are reasonably acceptable to the Administrative Agent and become parties by
executing an Assignment and Acceptance (the Lenders or other banking
institutions that agree to accept in whole or in part the Commitment of the
Terminated Lender being referred to herein as the "Replacement Lenders"), such
that the aggregate increased and/or accepted Commitments of the Replacement
Lenders under clauses (i) and (ii) above equal the Commitment of the Terminated
Lender.
(c) The Notice of Termination shall include the name of the Terminated
Lender, the date the termination will occur (the "Lender Termination Date"), and
the Replacement Lender or Replacement Lenders to which the Terminated Lender
will assign its Commitment and, if there will be more than one Replacement
Lender, the portion of the Terminated Lender's Commitment to be assigned to each
Replacement Lender.
(d) On the Lender Termination Date, (i) the Terminated Lender shall by
execution and delivery of an Assignment and Acceptance assign its Commitment to
the Replacement Lender or Replacement Lenders (pro rata, if there is more than
one Replacement Lender, in proportion to the portion of the Terminated Lender's
Commitment to be assigned to each Replacement Lender) indicated in the Notice of
Termination and shall assign to the Replacement Lender or Replacement Lenders
each of its Advances (if any) then outstanding and participation
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interests in Letters of Credit (if any) then outstanding (pro rata as
aforesaid), (ii) the Terminated Lender shall endorse its Note, payable without
recourse, representation or warranty to the order of the Replacement Lender or
Replacement Lenders (pro rata as aforesaid), (iii) the Replacement Lender or
Replacement Lenders shall purchase the Note held by the Terminated Lender (pro
rata as aforesaid) at a price equal to the unpaid principal amount thereof plus
interest and facility and other fees accrued and unpaid to the Lender
Termination Date, and (iv) the Replacement Lender or Replacement Lenders will
thereupon (pro rata as aforesaid) succeed to and be substituted in all respects
for the Terminated Lender with like effect as if becoming a Lender pursuant to
the terms of Section 9.06(a), and the Terminated Lender will have the rights and
benefits of an assignor under Section 9.06(a). To the extent not in conflict,
the terms of Section 9.06(a) shall supplement the provisions of this Section
2.15. For each assignment made under this Section 2.15, the Replacement Lender
shall pay to the Administrative Agent the processing fee provided for in Section
9.06(a). The Borrower will be responsible for the payment of any breakage costs
associated with termination and Replacement Lenders, as set forth in Section
2.12.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01 Conditions Precedent to Initial Advances. The effectiveness of
this Agreement and the amendment and restatement of the Existing Credit
Agreement is subject to the conditions precedent that:
(a) Documentation. The Administrative Agent shall have received the
following duly executed by all the parties thereto, in form and substance
satisfactory to the Administrative Agent, the Issuing Lender and the Lenders,
and, where applicable, in sufficient copies for each Lender:
(i) this Agreement, a Note payable to the order of each Lender in the
amount of its Commitment, the Guaranties, the Pledge Agreement, the Security
Agreements, and Mortgages encumbering substantially all of the Borrower's and
its Subsidiaries' (other than Foreign Subsidiaries) Oil and Gas Properties, and
each of the other Loan Documents, and all attached exhibits and schedules;
(ii) a favorable opinion of the Borrower's, its Subsidiaries' (other
than Foreign Subsidiaries) and the Guarantors' counsel dated as of the date of
this Agreement and substantially in the form of the attached Exhibit K covering
the matters discussed in such Exhibit and such other matters as any Lender
through the Administrative Agent may reasonably request;
(iii) copies, certified as of the date of this Agreement by a
Responsible Officer or the secretary or an assistant secretary of the Borrower
of (A) the resolutions of the Board of Directors of the Borrower approving the
Loan Documents to which it is a party, (B) the articles of incorporation and
bylaws of the Borrower, and (C) all other documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Agreement, the Note, and the other Loan Documents;
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(iv) certificates of a Responsible Officer or the secretary or an
assistant secretary of the Borrower certifying the names and true signatures of
officers of the Borrower authorized to sign this Agreement, the Notes, Notices
of Borrowing, Notices of Conversion or Continuation, and the other Loan
Documents to which the Borrower is a party;
(v) copies, certified as of the date of this Agreement by a
Responsible Officer or the secretary or an assistant secretary of each
Subsidiary of the Borrower (other than Foreign Subsidiaries) of (A) the
resolutions of the Board of Directors of such Subsidiary approving the Loan
Documents to which it is a party, (B) the articles or certificate (as
applicable) of incorporation (or organization) and bylaws of such Subsidiary,
and (C) all other documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the Guaranty, the Security
Instruments, and the other Loan Documents to which such Subsidiary is a party;
(vi) a certificate of the secretary or an assistant secretary of each
Subsidiary (other than Foreign Subsidiaries) certifying the names and true
signatures of officers of such Subsidiary authorized to sign the Guaranty,
Security Instruments and the other Loan Documents to which such Subsidiary is a
party;
(vii) a certificate dated as of the date of this Agreement from the
President or Chief Financial Officer of the Borrower stating that (A) all
representations and warranties of the Borrower set forth in this Agreement are
true and correct in all material respects; (B) no Default has occurred and is
continuing; and (C) the conditions in this Section 3.01 have been met;
(viii) appropriate UCC-1 or UCC-3 Financing Statements covering the
Collateral for filing with the appropriate authorities and any other documents,
agreements or instruments necessary to create an Acceptable Security Interest in
such Collateral;
(ix) stock certificates required in connection with the Pledge
Agreement and stock powers executed in blank for each such stock certificate;
(x) insurance certificates naming the Administrative Agent co-loss
payee or additional insured, as applicable, and evidencing insurance which meets
the requirements of this Agreement and the Security Instruments; and
(xi) such other documents, governmental certificates, agreements and
lien searches as the Administrative Agent or any Lender may reasonably request.
(b) Payment of Fees. On the date of this Agreement, the Borrower shall have
paid the fees then required by Section 2.08 and all costs and expenses which
have been invoiced and are payable pursuant to Section 9.04.
(c) Delivery of Financial Statements. The Administrative Agent and the
Lenders shall have received true and correct copies of (i) the Financial
Statements, (ii) the Interim Financial Statements and (iii) such other financial
information regarding the Borrower and its Subsidiaries or any of their
respective Properties as the Lenders may reasonably request.
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(d) Security Instruments. The Administrative Agent shall have received all
appropriate evidence required by the Administrative Agent and the Lenders in
their sole discretion necessary to determine that the Administrative Agent (for
its benefit and the benefit of the Lenders) shall have an Acceptable Security
Interest in the Collateral and that all actions or filings necessary to protect,
preserve and validly perfect such Liens have been made, taken or obtained, as
the case may be, and are in full force and effect.
(e) Title. The Administrative Agent shall be satisfied in its sole
discretion with the title to the Oil and Gas Properties included in the
Borrowing Base and that such Oil and Gas Properties constitute a percentage of
such Collateral reasonably satisfactory to the Administrative Agent.
(f) No Default. No Default shall have occurred and be continuing.
(g) Representations and Warranties. The representations and warranties
contained in Article IV hereof and in each other Loan Document shall be true and
correct in all material respects.
(h) Material Adverse Change. No event or circumstance that could cause a
Material Adverse Change shall have occurred.
(i) Existing Litigation. The Lenders shall be satisfied, in their sole
judgment, that the pending litigation set forth in Schedule 4.07 will not result
in a Material Adverse Change.
(j) No Proceeding or Litigation; No Injunctive Relief. No action, suit,
investigation or other proceeding (including the enactment or promulgation of a
statute or rule) by or before any arbitrator or any Governmental Authority shall
be threatened or pending and no preliminary or permanent injunction or order by
a state or federal court shall have been entered (i) in connection with this
Agreement or any transaction contemplated hereby except as set forth in Schedule
4.07 or (ii) which, in any case, in the reasonable judgment of the
Administrative Agent, could reasonably be expected to result in a Material
Adverse Change.
(k) Consents, Licenses, Approvals, etc. The Administrative Agent shall have
received true copies (certified to be such by the Borrower or other appropriate
party) of all consents, licenses and approvals required in accordance with
applicable law, or in accordance with any document, agreement, instrument or
arrangement to which the Borrower is a party, in connection with the execution,
delivery, performance, validity and enforceability of this Agreement and the
other Loan Documents. In addition, the Borrower and its Subsidiaries shall have
all such material consents, licenses and approvals required in connection with
the continued operation of the Borrower and its Subsidiaries, and such approvals
shall be in full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on this
Agreement and the actions contemplated hereby.
(l) Notice of Borrowing. The Administrative Agent shall have received a
Notice of Borrowing from the Borrower in the form of Exhibit F, with appropriate
insertions and executed by a duly authorized Responsible Officer of the
Borrower.
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Section 3.02 Conditions Precedent to All Borrowings. The obligation of each
Lender to make an Advance on the occasion of each Borrowing and of the Issuing
Lender to issue, increase, or extend any Letter of Credit shall be subject to
the further conditions precedent that on the date of such Borrowing or the
issuance, increase, or extension of such Letter of Credit:
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing, Notice of Conversion or Continuation, or Letter
of Credit Application and the acceptance by the Borrower of the proceeds of such
Borrowing or the issuance, increase, or extension of such Letter of Credit shall
constitute a representation and warranty by the Borrower that on the date of
such Borrowing, the issuance, increase, or extension of such Letter of Credit,
such statements are true):
(i) except such as are expressly made only as of a prior date (which
shall remain true and correct as of such prior date), the representations and
warranties contained in Article IV of this Agreement and the representations and
warranties contained in the Security Instruments, the Guaranties, and each of
the other Loan Documents are true and correct in all material respects on and as
of the date of such Borrowing or the date of the issuance, increase, or
extension of such Letter of Credit, before and after giving effect to such
Borrowing or to the issuance, increase, or extension of such Letter of Credit
and to the application of the proceeds from such Borrowing, as though made on
and as of such date; and
(ii) no Default has occurred and is continuing or would result from
such Borrowing or from the application of the proceeds therefrom, or would
result from the issuance, increase, or extension of such Letter of Credit; and
(b) the Administrative Agent shall have received such other approvals,
opinions, or documents reasonably deemed necessary or desirable by any Lender as
a result of circumstances occurring after the date of this Agreement, as any
Lender through the Administrative Agent may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01 Corporate Existence; Subsidiaries. The Borrower is a
corporation duly organized and validly existing under the laws of Texas and in
good standing and qualified to do business in each jurisdiction where its
ownership or lease of Property or conduct of its business requires such
qualification. Each Subsidiary of the Borrower is duly organized, validly
existing, and in good standing under the laws of its jurisdiction of formation
and in good standing and qualified to do business in each jurisdiction where its
ownership or lease of Property or conduct of its business requires such
qualification. The Borrower and its Subsidiaries have no Subsidiaries other than
those listed on Schedule 4.01. As of the date of this Agreement, except for ATP
(UK), none of the Subsidiaries of the Borrower own any Property or any interest
in any Property of any value material to the Borrower and its Subsidiaries on a
consolidated basis.
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Section 4.02 Corporate Power. The execution, delivery, and performance by
the Borrower of this Agreement, the Notes, and the other Loan Documents to which
it is a party and by its Subsidiaries of the Guaranties and the other Loan
Documents to which they are a party and the consummation of the transactions
contemplated hereby and thereby (a) are within the Borrower's and its
Subsidiaries' corporate powers, (b) have been duly authorized by all necessary
corporate action, (c) do not contravene (i) the Borrower's or any Subsidiary's
certificate or articles of incorporation, bylaws or other similar governance
documents or (ii) any law or any contractual restriction binding on or affecting
the Borrower or any Subsidiary, and (d) will not result in or require the
creation or imposition of any Lien prohibited by this Agreement. At the time of
each Advance, such Advance and the use of the proceeds of such Advance will be
within the Borrower's corporate ▇▇▇▇▇▇, ▇▇▇▇ have been duly authorized by all
necessary corporate action, will not contravene (i) the Borrower's articles of
organization or other organizational documents or (ii) any law or any
contractual restriction binding on or affecting the Borrower and will not result
in or require the creation or imposition of any Lien prohibited by this
Agreement.
Section 4.03 Authorization and Approvals. No consent, order, authorization,
or approval or other action by, and no notice to or filing with, any
Governmental Authority or any other Person is required for the due execution,
delivery, and performance by the Borrower of this Agreement, the Notes, or the
other Loan Documents to which the Borrower is a party or by each Subsidiary of
its Guaranty or the other Loan Documents to which it is a party or the
consummation of the transactions contemplated thereby. At the time of each
Borrowing and each issuance, increase or extension of a Letter of Credit, no
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority will be required for such Borrowing or such issuance,
increase or extension of such Letter of Credit or the use of the proceeds of
such Borrowing or such Letter of Credit.
Section 4.04 Enforceable Obligations. This Agreement, the Notes, and the
other Loan Documents to which the Borrower is a party have been duly executed
and delivered by the Borrower and the Guaranties and the other Loan Documents to
which any Subsidiary of the Borrower is a party have been duly executed and
delivered by such Subsidiaries. Each Loan Document is the legal, valid, and
binding obligation of the Borrower and each Subsidiary of the Borrower which is
a party to it enforceable against the Borrower and each such Subsidiary in
accordance with its terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors' rights generally and by general principles of equity.
Section 4.05 Financial Statements. The Borrower has delivered to the
Administrative Agent and the Lenders copies of the Financial Statements and the
Interim Financial Statements, and the Financial Statements and the Interim
Financial Statements are accurate and complete in all material respects and
present fairly the financial condition of the Borrower and its consolidated
Subsidiaries as of their respective dates and for their respective periods in
accordance with GAAP. As of the date of the Financial Statements, there were no
material contingent obligations, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses of the Borrower or
any of its Subsidiaries, except as disclosed therein and adequate reserves for
such items have been made in accordance with GAAP. All projections, estimates,
and pro forma financial information furnished by the Borrower to the
Administrative Agent or the Lenders were prepared on the basis of assumptions,
data,
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information, tests, or conditions believed to be reasonable at the time such
projections, estimates, and pro forma financial information were furnished.
Since the date of the Interim Financial Statements, no event or circumstance
that could cause a Material Adverse Change has occurred. As of the date of this
Agreement, none of the Borrower or any of its Subsidiaries has any Debt other
than the Debt reflected in the Interim Financial Statements or described on
Schedule 4.05.
Section 4.06 True and Complete Disclosure. All factual information
(excluding estimates) heretofore or contemporaneously furnished by or on behalf
of the Borrower or any of its Subsidiaries in writing to any Lender or the
Administrative Agent for purposes of or in connection with this Agreement, any
other Loan Document or any transaction contemplated hereby or thereby is, and
all other such factual information hereafter furnished by or on behalf of the
Borrower and its Subsidiaries in writing to the Administrative Agent or any of
the Lenders shall be, true and accurate in all material respects on the date as
of which such information is dated or certified and does not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements contained therein not misleading at such time. All
projections, estimates, and pro forma financial information furnished by the
Borrower to the Administrative Agent or the Lenders were prepared on the basis
of assumptions, data, information, tests, or conditions believed to be
reasonable at the time such projections, estimates, and pro forma financial
information were furnished.
Section 4.07 Litigation. Except as set forth on Schedule 4.07, there is no
pending or, to the best knowledge of the Borrower, threatened action or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
Governmental Authority or arbitrator which could reasonably be expected to cause
a Material Adverse Change or which purports to affect the legality, validity,
binding effect or enforceability of this Agreement, any Note, or any other Loan
Document. Additionally, there is no pending or, to the best knowledge of the
Borrower, threatened action or proceeding instituted against the Borrower or any
of its Subsidiaries which seeks to adjudicate the Borrower or any such
Subsidiary as bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee or other similar official for it or
for any substantial part of its Property.
Section 4.08 Use of Proceeds. The proceeds of the Advances will be used by
the Borrower for the purposes described in Section 5.09. The Borrower is not
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U). No proceeds of any
Advance will be used to purchase or carry any margin stock in violation of
Regulation T, U or X.
Section 4.09 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 4.10 Public Utility Holding Company Act. Neither the Borrower nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended. Neither the
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Administrative Agent nor any of the Lenders, solely by virtue of the execution,
delivery and performance of, and the consummation of the transactions
contemplated by, the Loan Documents shall be or become subject to regulation (a)
as a "holding company", or an "affiliate" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended, (b) under
the Federal Power Act, as amended, (c) as a "public utility" or "public service
corporation" or the equivalent under the applicable law of any state, or (d)
under the applicable laws of any state relating to public utilities or public
service corporations.
Section 4.11 Taxes.
(a) Reports and Payments. All Returns (as defined below in clause (c) of
this Section) required to be filed by or on behalf of the Borrower, its
Subsidiaries (other than Foreign Subsidiaries), or any member of the Controlled
Group (hereafter collectively called the "Tax Group") have been duly filed on a
timely basis or appropriate extensions have been obtained and such Returns are
and will be true, complete and correct, except where the failure to so file
would not be reasonably expected to cause a Material Adverse Change; and all
Taxes shown to be payable on the Returns or on subsequent assessments with
respect thereto will have been paid in full on a timely basis, and no other
Taxes will be payable by the Tax Group with respect to items or periods covered
by such Returns, except in each case to the extent of (i) reserves reflected in
the Financial Statements and the Interim Financial Statements, (ii) taxes that
are being contested in good faith, or (iii) such Taxes, the failure to pay which
would not cause a Material Adverse Change. The reserves for accrued Taxes
reflected in the financial statements delivered to the Lenders under this
Agreement are adequate in the aggregate for the payment of all unpaid Taxes,
whether or not disputed, for the period ended as of the date thereof and for any
period prior thereto, and for which the Tax Group may be liable in its own
right, as withholding agent or as a transferee of the assets of, or successor
to, any Person, except for such Taxes or reserves therefor, the failure to pay
or provide for which does not and could not cause a Material Adverse Change.
(b) Taxes Definition. "Taxes" in this Section 4.11 shall mean all taxes,
charges, fees, levies, or other assessments imposed by any federal, state,
local, or foreign taxing authority, including income, gross receipts, excise,
real or personal property, sales, occupation, use, service, leasing,
environmental, value added, transfer, payroll, and franchise taxes (and
including any interest, penalties, or additions to tax attributable to or
imposed on with respect to any such assessment).
(c) Returns Definition. "Returns" in this Section 4.11 shall mean any
federal, state, local, or foreign report, estimate, declaration of estimated
Tax, information statement or return relating to, or required to be filed in
connection with, any Taxes, including any information return or report with
respect to backup withholding or other payments of third parties.
Section 4.12 Pension Plans. All Plans are in compliance in all material
respects with all applicable provisions of ERISA. No Termination Event has
occurred with respect to any Plan, and each Plan has complied with and been
administered in all material respects in accordance with applicable provisions
of ERISA and the Code. No "accumulated funding deficiency" (as defined in
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. No Reportable Event has occurred with respect to
any Multiemployer
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Plan, and each Multiemployer Plan has complied with and been administered in all
material respects with applicable provisions of ERISA and the Code. The present
value of all benefits vested under each Plan (based on the assumptions used to
fund such Plan) did not, as of the last annual valuation date applicable
thereto, exceed the value of the assets of such Plan allocable to such vested
benefits. Neither the Borrower nor any member of the Controlled Group has had a
complete or partial withdrawal from any Multiemployer Plan for which there is
any withdrawal liability. As of the most recent valuation date applicable
thereto, neither the Borrower nor any member of the Controlled Group would
become subject to any liability under ERISA if the Borrower or any member of the
Controlled Group has received notice that any Multiemployer Plan is insolvent or
in reorganization. Based upon GAAP existing as of the date of this Agreement and
current factual circumstances, the Borrower has no reason to believe that the
annual cost during the term of this Agreement to the Borrower or any member of
the Controlled Group for post-retirement benefits to be provided to the current
and former employees of the Borrower or any member of the Controlled Group under
Plans that are welfare benefit plans (as defined in Section 3(1) of ERISA)
could, in the aggregate, reasonably be expected to cause a Material Adverse
Change.
Section 4.13 Condition of Property; Casualties. The Borrower and each of
its Subsidiaries (other than Foreign Subsidiaries) has good and indefeasible
title to all of its Properties as is customary in the oil and gas industry in
all material respects, free and clear of all Liens except for Permitted Liens.
The material Properties used or to be used in the continuing operations of the
Borrower and each of its Subsidiaries (other than Foreign Subsidiaries) are in
good repair, working order and condition. Since the date of the Interim
Financial Statements, neither the business nor the material Properties of the
Borrower and each of its Subsidiaries (other than Foreign Subsidiaries), taken
as a whole, has been materially and adversely affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of Property or cancellation of
contracts, Permits, or concessions by a Governmental Authority, riot, activities
of armed forces, or acts of God or of any public enemy.
Section 4.14 No Burdensome Restrictions; No Defaults.
(a) Neither the Borrower nor any of its Subsidiaries is a party to any
indenture, loan, or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction or provision of
applicable law or governmental regulation which would reasonably be expected to
cause a Material Adverse Change. Except as may be determined in any litigation
set forth in Schedule 4.07, neither the Borrower nor any of its Subsidiaries
(other than Foreign Subsidiaries) is in default under or with respect to any
contract, agreement, lease, or other instrument to which the Borrower or any
such Subsidiary is a party and which could reasonably be expected to cause a
Material Adverse Change. Except as may be determined in any litigation set forth
in Schedule 4.07, neither the Borrower nor any Subsidiary (other than Foreign
Subsidiaries) has received any notice of default under any material contract,
agreement, lease, or other instrument to which the Borrower or such Subsidiary
is a party.
(b) No Default has occurred and is continuing.
Section 4.15 Environmental Condition.
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(a) Permits, Etc. Except as set forth on Schedule 4.15, the Borrower and
its Subsidiaries (other than Foreign Subsidiaries) (i) have obtained all
Permits, including any Permits required under any Environmental Law necessary
for the ownership and operation of their respective Properties and the conduct
of their respective businesses, except where the failure to have any such Permit
could not reasonably be expected to cause a Material Adverse Change; (ii) have
at all times been and are in material compliance with all terms and conditions
of such Permits and with all other material requirements of applicable
Environmental Laws; (iii) have not received notice of any material violation or
alleged material violation of any Environmental Law or Permit; and (iv) are not
subject to any actual or contingent Environmental Claim, which could reasonably
be expected to cause a Material Adverse Change.
(b) Certain Liabilities. Except as set forth on Schedule 4.15, to the
Borrower's actual knowledge, none of the present or previously owned or operated
Property of the Borrower or any Subsidiary of the Borrower (other than Foreign
Subsidiaries) or of any of their former Subsidiaries, wherever located, (i) has
been placed on or proposed to be placed on the National Priorities List, the
Comprehensive Environmental Response Compensation Liability Information System
list, or their state or local analogs, or have been otherwise investigated,
designated, listed, or identified as a potential site for removal, remediation,
cleanup, closure, restoration, reclamation, or other response activity under any
Environmental Laws; (ii) is subject to a Lien, arising under or in connection
with any Environmental Laws, that attaches to any revenues or to any Property
owned or operated by the Borrower or any of its Subsidiaries, wherever located,
which could reasonably be expected to cause a Material Adverse Change; or (iii)
has been the site of any Release of Hazardous Substances or Hazardous Wastes
from present or past operations which has caused at the site or at any
third-party site any condition that has resulted in or could reasonably be
expected to result in the need for Response that would cause a Material Adverse
Change.
(c) Certain Actions. Except as set forth on Schedule 4.15, without limiting
the foregoing, (i) all necessary notices have been properly filed, and no
further action is required under current Environmental Law as to each Response
or other restoration or remedial project undertaken by the Borrower or its
Subsidiaries (other than Foreign Subsidiaries) or any of their former
Subsidiaries on any of their presently or formerly owned or operated Property
and (ii) the present and, to the Borrower's best knowledge, future liability, if
any, of the Borrower and its Subsidiaries (other than Foreign Subsidiaries)
which could reasonably be expected to arise in connection with requirements
under Environmental Laws will not result in a Material Adverse Change.
Section 4.16 Permits, Licenses, Etc. The Borrower and its Subsidiaries
(other than Foreign Subsidiaries) possess all authorizations, Permits, licenses,
patents, patent rights or licenses, trademarks, trademark rights, trade names
rights and copyrights which are material to the conduct of their business. The
Borrower and its Subsidiaries (other than Foreign Subsidiaries) manage and
operate their business in all material respects in accordance with all
applicable Legal Requirements and good industry practices.
Section 4.17 Gas Contracts. Neither the Borrower nor any of its
Subsidiaries (other than Foreign Subsidiaries) , as of the date hereof, (a) is
obligated in any material respect by virtue of any prepayment made under any
contract containing a "take-or-pay" or "prepayment"
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provision or under any similar agreement to deliver hydrocarbons produced from
or allocated to any of the Borrower's and its Subsidiaries' (other than Foreign
Subsidiaries) Oil and Gas Properties at some future date without receiving full
payment therefor at the time of delivery, or (b) except as has been disclosed to
the Administrative Agent, has produced gas, in any material amount, subject to,
and none of the Borrower's and its Subsidiaries' (other than Foreign
Subsidiaries) Oil and Gas Properties is subject to, balancing rights of third
parties or subject to balancing duties under governmental requirements.
Section 4.18 Liens; Titles, Leases, Etc. None of the Property of the
Borrower or any of its Subsidiaries (other than Foreign Subsidiaries) is subject
to any Lien other than Permitted Liens. On the date of this Agreement, all
governmental actions and all other filings, recordings, registrations, third
party consents (other than the routine filings of counterparts of the Security
Instruments) and other actions which are necessary to create and perfect the
Liens provided for in the Security Instruments will have been made, obtained and
taken in all relevant jurisdictions. All leases and agreements for the conduct
of business of the Borrower and its Subsidiaries (other than Foreign
Subsidiaries) are valid and subsisting, in full force and effect and there
exists no default or event of default or circumstance which with the giving of
notice or lapse of time or both would give rise to a default under any such
leases or agreements which could reasonably be expected to cause a Material
Adverse Change. Neither the Borrower nor any of its Subsidiaries (other than
Foreign Subsidiaries) is a party to any agreement or arrangement (other than
this Agreement and the Security Instruments and the Note Purchase Agreement and
the documents securing payment of the Debt of the Borrower thereunder), or
subject to any order, judgment, writ or decree, which either restricts or
purports to restrict its ability to grant Liens to secure the Obligations
against their respective assets or Properties.
Section 4.19 Solvency and Insurance. Before and after giving effect to the
making of the initial Advances, the Borrower is Solvent. Furthermore, each of
the Borrower and its Subsidiaries carry insurance required under Section 5.02 of
this Agreement.
Section 4.20 Hedging Agreements. Schedule 4.20 sets forth, as of the date
hereof, a true and complete list of all Interest Hedge Agreements, Hydrocarbon
Hedge Agreements, and any other hedging agreement (including commodity price
swap agreements, forward agreements or contracts of sale which provide for
prepayment for deferred shipment or delivery of oil, gas or other commodities)
of the Borrower and each Subsidiary of the Borrower, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net ▇▇▇▇ to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied), and the
counterparty to each such agreement.
Section 4.21 Material Agreements. Schedule 4.21 sets forth a complete and
correct list of all material agreements, leases, indentures, purchase
agreements, obligations in respect of letters of credit, guarantees, joint
venture agreements, and other instruments in effect or to be in effect as of the
date hereof (other than the agreements set forth in Schedule 4.20, this
Agreement, the Notes, the Security Instruments and any other Loan Documents)
providing for, evidencing, securing or otherwise relating to any Debt of the
Borrower or any of its Subsidiaries, and all obligations of the Borrower or any
of its Subsidiaries to issuers of surety or appeal bonds issued for the account
of the Borrower or any such Subsidiary, and such list correctly sets forth the
names of the debtor or lessee and creditor or lessor with respect to the Debt or
lease obligations
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outstanding or to be outstanding and the Property subject to any Lien securing
such Debt or lease obligation. Also set forth on Schedule 4.21 hereto is a
complete and correct list of all material agreements and other instruments of
the Borrower and its Subsidiaries in effect as of the date hereof and relating
to the purchase, transportation by pipeline, gas processing, marketing, sale and
supply of natural gas and other Hydrocarbons. The Borrower has heretofore
delivered to the Administrative Agent and the Lenders a complete and correct
copy of all such material credit agreements, indentures, purchase agreements,
contracts, letters of credit, guarantees, joint venture agreements, or other
instruments, including any modifications or supplements thereto, as in effect on
the date hereof.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Loan Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Lender shall have
any Commitment hereunder, the Borrower agrees, unless the Majority Lenders shall
otherwise consent in writing, to comply with the following covenants.
Section 5.01 Compliance with Laws, Etc. The Borrower shall comply, and
cause each of its Subsidiaries (other than Foreign Subsidiaries) to comply, in
all material respects with all Legal Requirements. Without limiting the
generality and coverage of the foregoing, the Borrower shall comply, and shall
cause each of its Subsidiaries (other than Foreign Subsidiaries) to comply, in
all material respects, with all Environmental Laws and all laws, regulations, or
directives with respect to equal employment opportunity and employee safety in
all jurisdictions in which the Borrower or any such Subsidiaries do business;
provided, however, that this Section 5.01 shall not prevent the Borrower or such
Subsidiaries from, in good faith and with reasonable diligence, contesting the
validity or application of any such laws or regulations by appropriate legal
proceedings. Without limitation of the foregoing, the Borrower shall, and shall
cause each of its Subsidiaries (other than Foreign Subsidiaries) to, (a)
maintain and possess all authorizations, Permits, licenses, trademarks, trade
names, rights and copyrights which are necessary to the conduct of its business
and (b) obtain, as soon as practicable, all consents or approvals required from
any states of the United States (or other Governmental Authorities) necessary to
grant the Administrative Agent an Acceptable Security Interest in the Borrower's
and its Subsidiaries' (other than Foreign Subsidiaries') Oil and Gas Properties.
Section 5.02 Maintenance of Insurance.
(a) The Borrower shall, and shall cause each of its Subsidiaries (other
than Foreign Subsidiaries) to, procure and maintain or cause to be procured and
maintained continuously in effect policies of insurance in form and amounts and
issued by companies, associations or organizations reasonably satisfactory to
the Administrative Agent covering such casualties, risks, perils, liabilities
and other hazards reasonably required by the Administrative Agent. In addition,
the Borrower shall, and shall cause each of its relevant Subsidiaries to, comply
with all requirements regarding insurance contained in the Security Instruments
to which they are parties.
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(b) Certified copies of policies or certificates thereof, and endorsements
and renewals thereof shall be delivered to and retained by the Administrative
Agent. All policies of insurance shall either have attached thereto a lender's
loss payable endorsement for the benefit of the Administrative Agent, as joint
loss payee in form reasonably satisfactory to the Administrative Agent or shall
name the Administrative Agent as an additional insured, as applicable. The
Borrower shall furnish the Administrative Agent with a certificate of insurance
or a certified copy of all policies of insurance required. All policies or
certificates of insurance shall set forth the coverage, the limits of liability,
the name of the carrier, the policy number, and the period of coverage. In
addition, all policies of insurance required under the terms hereof shall
contain an endorsement or agreement by the insurer that any loss shall be
payable in accordance with the terms of such policy notwithstanding any act of
negligence of the Borrower, or a Subsidiary of the Borrower or any party holding
under the Borrower or a Subsidiary of the Borrower which might otherwise result
in a forfeiture of the insurance and the further agreement of the insurer
waiving all rights of setoff, counterclaim or deductions against the Borrower
and its Subsidiaries. All such policies shall contain a provision that
notwithstanding any contrary agreements between the Borrower, its Subsidiaries,
and the applicable insurance company, such policies will not be canceled,
allowed to lapse without renewal, surrendered or amended (which provision shall
include any reduction in the scope or limits of coverage) without at least 30
days' prior written notice to the Administrative Agent.
(c) With respect to the proceeds of any insurance policy, (i) prior to the
occurrence and continuance of an Event of Default, such proceeds shall be paid
directly to the Borrower or the applicable Subsidiary of the Borrower to the
extent necessary to repair or replace the damaged or destroyed Property covered
by such policy, and the remaining amount, if any, shall be paid directly to the
Administrative Agent and if necessary, assigned to the Administrative Agent, to
be applied in accordance with clause (d) below, and (ii) after the occurrence
and during the continuance of an Event of Default, all proceeds of insurance,
including any casualty insurance proceeds, property insurance proceeds, proceeds
from actions, and any other proceeds, shall be paid directly to the
Administrative Agent and if necessary, assigned to the Administrative Agent, to
be applied in accordance with clause (d) below. In the event that any such
proceeds are paid to the Borrower or any of its relevant Subsidiaries in
violation of this clause (c), the Borrower or such Subsidiary shall hold the
proceeds in trust for the Administrative Agent, segregate the proceeds from the
other funds of the Borrower or such Subsidiary, and promptly pay the proceeds to
the Administrative Agent with any necessary endorsement. Upon the request of the
Administrative Agent, each of the Borrower and its Subsidiaries (other than
Foreign Subsidiaries) shall execute and deliver to the Administrative Agent any
additional assignments and other documents as may be necessary or desirable to
enable the Administrative Agent to directly collect the proceeds as set forth
herein.
(d) With respect to the proceeds of any insurance required to be paid to
the Administrative Agent hereunder, (i) prior to the occurrence and continuance
of an Event of Default, the Administrative Agent shall use such proceeds first
against accrued interest and any fees owing, then against Reference Rate
Advances, and then as determined by the Administrative Agent and agreed to by
the Lenders in their sole discretion, and (ii) after the occurrence and during
the continuance of an Event of Default, the Administrative Agent may apply such
proceeds as it determines and agreed to by the Lenders in their sole discretion.
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Section 5.03 Preservation of Corporate Existence, Etc. The Borrower shall
preserve and maintain, and cause each of its Subsidiaries (other than Foreign
Subsidiaries) to preserve and maintain, its corporate existence, rights,
franchises, and privileges in the jurisdiction of its incorporation or
organization, as applicable, and qualify and remain qualified, and cause each
such Subsidiary to qualify and remain qualified, as a foreign corporation in
each jurisdiction in which qualification is necessary or desirable in view of
its business and operations or the ownership of its Properties, and, in each
case, where failure to qualify or preserve and maintain its rights and
franchises could reasonably be expected to cause a Material Adverse Change.
Section 5.04 Payment of Taxes, Etc. The Borrower shall pay and discharge,
and cause each of its Subsidiaries (other than Foreign Subsidiaries) to pay and
discharge, before the same shall become delinquent, (a) all taxes, assessments,
and governmental charges or levies imposed upon it or upon its income or profits
or Property that are material in amount, prior to the date on which penalties
attach thereto and (b) all lawful claims that are material in amount which, if
unpaid, might by law become a Lien upon its Property; provided, however, that
neither the Borrower nor any such Subsidiary shall be required to pay or
discharge any such tax, assessment, charge, levy, or claim which is being
contested in good faith and by appropriate proceedings, and with respect to
which reserves in conformity with GAAP have been provided.
Section 5.05 Visitation Rights. At any reasonable time and from time to
time, upon reasonable notice, the Borrower shall, and shall cause its
Subsidiaries (other than Foreign Subsidiaries) to, permit the Administrative
Agent and any Lender or any of their respective agents or representatives, to
(a) examine and make copies of and abstracts from the records and books of
account of, and visit and inspect, at their reasonable discretion the Properties
of the Borrower and any such Subsidiary, and (b) discuss the affairs, finances
and accounts of the Borrower and any such Subsidiary with any of their
respective officers or directors; provided that any visits to sites at which
Hydrocarbons are located shall be at their risk, but only to the extent of any
liability in excess of the limits of applicable insurance carried by the
Borrower or the relevant Subsidiary.
Section 5.06 Reporting Requirements. The Borrower shall furnish to the
Administrative Agent and each Lender:
(a) Annual Financials. (i) As soon as available and in any event not later
than 95 days after the end of each fiscal year of the Borrower and its
consolidated Subsidiaries, (A) a copy of the annual audit report for such year
for the Borrower and its consolidated Subsidiaries, including therein the
Borrower's consolidated balance sheet as of the end of such fiscal year and the
Borrower's consolidated statements of income, cash flows, and retained earnings,
in each case certified by KPMG, LLP or other independent certified public
accountants of national standing reasonably acceptable to the Administrative
Agent and including any management letters delivered by such accountants to the
Borrower or any Subsidiary of the Borrower in connection with such audit, (B) a
certificate of such accounting firm to the Administrative Agent and the Lenders
stating that, in the course of the regular audit of the business of the Borrower
and its consolidated Subsidiaries, which audit was conducted by such accounting
firm in accordance with generally accepted auditing standards, such accounting
firm has obtained no knowledge that a Default has occurred and is continuing, or
if, in the opinion of such accounting firm, a Default has occurred and is
continuing, a statement as to the nature thereof, and (C) a
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Compliance Certificate executed by the Chief Financial Officer of the Borrower
and (ii) a copy of the unaudited annual consolidating financial statements of
each of its consolidated Subsidiaries, including therein such Subsidiary's
balance sheet and statements of income, cash flows, and retained earnings for
such fiscal year.
(b) Quarterly Financials. As soon as available and in any event not later
than 50 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower and its consolidated Subsidiaries, (i) the unaudited
balance sheet and the statements of income, cash flows, and retained earnings of
each such Person for the period commencing at the end of the previous year and
ending with the end of such fiscal quarter, all in reasonable detail and duly
certified with respect to such consolidated statements (subject to year-end
audit adjustments) by the Chief Financial Officer of the Borrower as having been
prepared in accordance with GAAP and (ii) a Compliance Certificate executed by
the Chief Financial Officer of the Borrower.
(c) Oil and Gas Reserve Reports.
(i) As soon as available but in any event on or before each June 1,
September 1, and December 1, of each year, an Internal Engineering Report dated
effective as of April 1, July 1 or October 1, respectively, for such year.
(ii) As soon as available but in any event on or before March 15 of
each year an Independent Engineering Report dated effective as of January 1 for
such year.
(iii) Such other information as may be reasonably requested by any
Lender with respect to the Oil and Gas Properties included or to be included in
the Borrowing Base.
(iv) With the delivery of each Engineering Report, a certificate from
a Responsible Officer of the Borrower certifying that, to the best of his
knowledge and in all material respects: (a) except for projections which have
been made on the basis of the best available information and accepted petroleum
engineering practices, the information contained in the Engineering Report and
any other information delivered in connection therewith is true and correct, (b)
the Borrower owns good and defensible title to the Oil and Gas Properties
evaluated in such Engineering Report and such Properties are free of all Liens
except for Permitted Liens, (c) except as set forth on an exhibit to the
certificate, on a net basis there are no gas imbalances, take or pay or other
prepayments with respect to its Oil and Gas Properties evaluated in such
Engineering Report which would require the Borrower to deliver Hydrocarbons
produced from such Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor, (d) none of its Oil and Gas
Properties have been sold since the date of the last Borrowing Base
determination except as set forth on an exhibit to the certificate, which
certificate shall list all of its Oil and Gas Properties sold and in such detail
as reasonably required by the Majority Lenders, (e) attached to the certificate
is a list of its Oil and Gas Properties added to and deleted from the
immediately prior Engineering Report and a list showing any change in working
interest or net revenue interest in its Oil and Gas Properties occurring and the
reason for such change, (f) attached to the certificate is a list of all Persons
disbursing proceeds to the Borrower from its Oil and Gas Properties, (g) except
as set forth on a schedule attached to the certificate, all of the Oil and Gas
Properties evaluated by such Engineering Report are pledged as Collateral for
the Obligations, (h) the projections made in such Engineering Report also take
into
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account projected Capital Expenditures for the period therein specified, and (i)
such projected Capital Expenditures were determined in good faith and based on
reasonable assumptions regarding the Borrower's and its Subsidiaries' (other
than Foreign Subsidiaries') Capital Expenditure requirements for such period.
(d) Production Reports. As soon as available and in any event within 30
days after the end of each calendar month, a report certified by a Responsible
Officer of the Borrower in form and substance satisfactory to the Administrative
Agent prepared by the Borrower covering each of the Oil and Gas Properties of
the Borrower and its Subsidiaries (other than Foreign Subsidiaries) and
detailing on a monthly basis (i) the production, revenue, and price information
and associated operating expenses for each such month, (ii) any changes to any
producing reservoir, production equipment, or producing well during each such
month, which changes could cause a Material Adverse Change and (iii) any sales
of the Borrower's or any such Subsidiaries' Oil and Gas Properties during each
such month.
(e) Defaults. As soon as possible and in any event within five days after
(i) the occurrence of any Default or (ii) the occurrence of any default under
the Note Purchase Agreement, in each case known to any officer of the Borrower
or any of its Subsidiaries which is continuing on the date of such statement, a
statement of the Chief Financial Officer of the Borrower setting forth the
details of such Default or default, as applicable, and the actions which the
Borrower has taken and proposes to take with respect thereto.
(f) Termination Events. As soon as possible and in any event (i) within 30
days after the Borrower or any member of the Controlled Group knows or has
reason to know that any Termination Event described in clause (a) of the
definition of Termination Event with respect to any Plan has occurred, and (ii)
within 10 days after the Borrower or any of its Affiliates knows or has reason
to know that any other Termination Event with respect to any Plan has occurred,
a statement of the Chief Financial Officer of the Borrower describing such
Termination Event and the action, if any, which the Borrower or such Affiliate
proposes to take with respect thereto.
(g) Termination of Plans. Promptly and in any event within two Business
Days after receipt thereof by the Borrower or any member of the Controlled Group
from the PBGC, copies of each notice received by the Borrower or any such member
of the Controlled Group of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan.
(h) Other ERISA Notices. Promptly and in any event within five Business
Days after receipt thereof by the Borrower or any member of the Controlled Group
from a Multiemployer Plan sponsor, a copy of each notice received by the
Borrower or any member of the Controlled Group concerning the imposition or
amount of withdrawal liability pursuant to Section 4202 of ERISA.
(i) Environmental Notices. Promptly upon the receipt thereof by the
Borrower or any of its Subsidiaries (other than Foreign Subsidiaries), a copy of
any form of request, notice, summons or citation received from the Environmental
Protection Agency, or any other Governmental Authority, concerning (i)
violations or alleged violations of Environmental Laws, which seeks to impose
liability therefor and could cause a Material Adverse Change, (ii) any action or
omission on the part of the Borrower or any such Subsidiary or any of their
former
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Subsidiaries in connection with Hazardous Waste or Hazardous Substances which
could reasonably result in the imposition of liability therefor that could cause
a Material Adverse Change, including any information request related to, or
notice of, potential responsibility under CERCLA, or (iii) concerning the filing
of a Lien upon, against or in connection with the Borrower or any such
Subsidiary or their former Subsidiaries, or any of their leased or owned
Property, wherever located.
(j) Other Governmental Notices. Promptly and in any event within five
Business Days after receipt thereof by the Borrower or any Subsidiary (other
than Foreign Subsidiaries), a copy of any notice, summons, citation, or
proceeding seeking to modify in any material respect, revoke, or suspend any
material contract, license, or agreement with any Governmental Authority.
(k) Material Changes. Prompt written notice of any condition or event of
which the Borrower has knowledge, which condition or event has resulted or may
reasonably be expected to result in (i) a Material Adverse Change or (ii) a
breach of or noncompliance with any material term, condition, or covenant of any
material contract to which the Borrower or any of its Subsidiaries (other than
Foreign Subsidiaries) is a party or by which they or their Properties may be
bound.
(l) Disputes, Etc. Prompt written notice of (i) any claims, legal or
arbitration proceedings, proceedings before any Governmental Authority, or
disputes, or to the knowledge of the Borrower threatened, or affecting the
Borrower, or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to cause a Material Adverse Change, or any material labor
controversy of which the Borrower or any of its Subsidiaries has knowledge
resulting in or reasonably considered to be likely to result in a strike against
the Borrower or any of its Subsidiaries (other than Foreign Subsidiaries) and
(ii) any claim, judgment, Lien or other encumbrance (other than a Permitted
Lien) affecting any Property of the Borrower or any Subsidiary (other than
Foreign Subsidiaries) if the value of the claim, judgment, Lien, or other
encumbrance affecting such Property shall exceed $100,000.
(m) Other Accounting Reports. Promptly upon receipt thereof, a copy of each
other report or letter submitted to the Borrower or any Subsidiary of the
Borrower (other than Foreign Subsidiaries) by independent accountants in
connection with any annual, interim or special audit made by them of the books
of the Borrower and its Subsidiaries, and a copy of any response by the Borrower
or any Subsidiary of the Borrower, or the board of directors of the Borrower or
any Subsidiary of the Borrower, to such letter or report.
(n) SEC Filings, Etc. Promptly upon its becoming available, each financial
statement, report, notice or proxy statement sent by the Borrower to
stockholders generally and each regular or periodic report and any registration
statement, prospectus or written communication (other than transmittal letters)
in respect thereof filed by the Borrower with or received by the Borrower in
connection therewith from any securities exchange or the SEC or any successor
agency.
(o) Notices Under Other Loan Agreements. Promptly after the furnishing
thereof, copies of any statement, report or notice furnished to any Person
pursuant to the terms of any
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indenture, loan or credit or other similar agreement, other than this Agreement
and not otherwise required to be furnished to the Lenders pursuant to any other
provision of this Agreement.
(p) Hedging Agreements. As soon as available and in any event within 10
Business Days after the last day of each fiscal quarter, a report, in form and
substance satisfactory to the Administrative Agent, setting forth as of the last
Business Day of such fiscal quarter a true and complete list of all Interest
Hedge Agreements and Hydrocarbon Hedge Agreements (including commodity price
swap agreements, forward agreements or contracts of sale which provide for
prepayment for deferred shipment or delivery of oil, gas or other commodities)
of the Borrower and each Subsidiary (other than Foreign Subsidiaries), the
material terms thereof (including the type, term, effective date, termination
date and notional amounts or volumes), the net ▇▇▇▇ to market value therefor,
any new credit support agreements relating thereto not listed on Schedule 4.20
any margin required or supplied under any credit support document, and the
counterparty to each such agreement.
(q) Other Information. Such other information respecting the business or
Properties, or the condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries, as any Lender through the Administrative
Agent may from time to time reasonably request. The Administrative Agent agrees
to provide the Lenders with copies of any material notices and information
delivered solely to the Administrative Agent pursuant to the terms of this
Agreement.
Section 5.07 Maintenance of Property. The Borrower shall, and shall cause
each of its Subsidiaries (other than Foreign Subsidiaries) to, maintain their
respective owned, leased, or operated Property in good condition and repair; and
shall abstain, and cause each of such Subsidiaries to abstain, from knowingly or
willfully permitting the commission of waste or other injury, destruction, or
loss of natural resources, or the occurrence of pollution, contamination, or any
other condition in, on or about the owned or operated Property involving the
Environment that could reasonably be expected to result in Response activities
and that could reasonably be expected to cause a Material Adverse Change.
Section 5.08 Agreement to Pledge. The Borrower shall, and shall cause each
Subsidiary (other than Foreign Subsidiaries) to, grant to the Administrative
Agent an Acceptable Security Interest in any Property of the Borrower or any
such Subsidiary now owned or hereafter acquired promptly after receipt of a
written request from the Administrative Agent.
Section 5.09 Use of Proceeds. The Borrower shall use the proceeds of the
Advances and Letters of Credit to finance the acquisition and development of
domestic oil and gas reserves and working capital in connection therewith, and
other general corporate purposes. Other than as permitted in Sections 6.02(g)
and 6.06(b), the Borrower shall not use the proceeds of any Advance or Letter of
Credit in connection with the development and production expenses of operations
conducted outside the United States. Except as permitted in Section 6.21, the
Borrower may not pay or guaranty any Debt of a Foreign Subsidiary without
obtaining the prior consent of the Majority Lenders.
Section 5.10 Title Opinions. The Borrowers shall from time to time upon the
reasonable request of the Administrative Agent, take such actions and execute
and deliver such
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documents and instruments as the Administrative Agent shall require to ensure
that the Administrative Agent shall, at all times, have received satisfactory
title reviews (including if requested, supplemental or new title opinions
addressed to it), which title opinions shall be in form and substance acceptable
to the Administrative Agent in its sole discretion and shall include opinions
regarding the before payout and after payout ownership interests held by the
Borrower and its Subsidiaries (other than Foreign Subsidiaries), for all ▇▇▇▇▇
located on the Oil and Gas Properties covered thereby as to the ownership of Oil
and Gas Properties of the Borrower and its Subsidiaries (other than Foreign
Subsidiaries), and reflecting that the Administrative Agent has an Acceptable
Security Interest in such Oil and Gas Properties of the Borrower and its
Subsidiaries (other than Foreign Subsidiaries), constituting at least 90% of the
present value of the Proven Reserves of the Borrower and its Subsidiaries (other
than Foreign Subsidiaries) and at least 90% of the present value of the proved
developed producing reserves of the Borrower and its Subsidiaries as determined
by the Administrative Agent.
Section 5.11 Further Assurances; Cure of Title Defects. The Borrower shall
and shall cause each Subsidiary (other than Foreign Subsidiaries) to cure
promptly any defects in the creation and issuance of the Notes and the execution
and delivery of the Security Instruments and this Agreement. The Borrower hereby
authorizes the Lenders or the Administrative Agent to file any financing
statements without the signature of the Borrower to the extent permitted by
applicable law in order to perfect or maintain the perfection of any security
interest granted under any of the Loan Documents. The Borrower at its expense
will and will cause each Subsidiary (other than Foreign Subsidiaries) to
promptly execute and deliver to the Administrative Agent upon request all such
other documents, agreements and instruments to comply with or accomplish the
covenants and agreements of the Borrower or any such Subsidiary, as the case may
be, in the Security Instruments and this Agreement, or to further evidence and
more fully describe the collateral intended as security for the Notes, or to
correct any omissions in the Security Instruments, or to state more fully the
security obligations set out herein or in any of the Security Instruments, or to
perfect, protect or preserve any Liens created pursuant to any of the Security
Instruments, or to make any recordings, to file any notices or obtain any
consents, all as may be necessary or appropriate in connection therewith. Within
45 days after (a) a request by the Administrative Agent or the Lenders to cure
any title defects or exceptions which are not Permitted Liens raised by such
information, or (b) a notice by the Administrative Agent of the Borrower's
failure to comply with the last sentence of Section 5.10, the Borrower shall (i)
cure such title defects or exceptions which are not Permitted Liens or
substitute acceptable Oil and Gas Properties of the Borrower or its Subsidiaries
(other than Foreign Subsidiaries) with no title defects or exceptions except for
Permitted Liens covering Collateral of an equivalent value and (ii) deliver to
the Administrative Agent satisfactory title evidence (including supplemental or
new title opinions meeting the foregoing requirements) in form and substance
acceptable to the Administrative Agent in its reasonable business judgment as to
the Borrower's and such Subsidiaries' ownership of such Oil and Gas Properties
and the Administrative Agent's Liens and security interests therein as are
required to maintain compliance with Section 5.10. If within such 45 day period
the Borrower satisfies both clause (i) and clause (ii) set forth above, then no
Default or Event of Default shall have occurred as a result of such title defect
or exception.
Section 5.12 Trade Payables. The Borrower shall, and shall cause each
Subsidiary to, within 60 days after the same becomes due (or, with respect to
any vendor, within such longer
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period as is acceptable to such vendor) pay all Debt (other than the
Obligations) owed by it and maintain appropriate accruals and reserves for all
of the foregoing Debt in accordance with GAAP.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Loan Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Lender shall have
any Commitment, the Borrower agrees, unless the Majority Lenders otherwise
consent in writing, to comply with the following covenants.
Section 6.01 Liens, Etc. The Borrower shall not create, assume, incur, or
suffer to exist, or permit any of its Subsidiaries (other than Foreign
Subsidiaries) to create, assume, incur, or suffer to exist, any Lien on or in
respect of any of its Property whether now owned or hereafter acquired, or
assign any right to receive income, except that the Borrower and its
Subsidiaries (other than Foreign Subsidiaries) may create, incur, assume, or
suffer to exist:
(a) Liens securing the Obligations;
(b) Liens specified in the attached Schedule 6.01 on the Property owned by
the Borrower and such Subsidiaries which is specified therein; provided that
such Liens may secure only the Debt disclosed therein to be secured by such
Liens and only for the amount of Debt disclosed therein;
(c) purchase money Liens or purchase money security interests upon or in
any equipment acquired or held by the Borrower or any such Subsidiary in the
ordinary course of business prior to or at the time of the Borrower's or such
Subsidiary's acquisition of such equipment; provided that, the Debt secured by
such Liens (i) was incurred solely for the purpose of financing the acquisition
of such equipment, and does not exceed the aggregate purchase price of such
equipment, (ii) is secured only by such equipment and not by any other assets of
the Borrower or any Subsidiary of the Borrower, and (iii) is not increased in
amount;
(d) Liens for taxes, assessments, or other governmental charges or levies
not yet due or that (provided foreclosure, sale, or other similar proceedings
shall not have been initiated) are being contested in good faith by appropriate
proceedings, and such reserve as may be required by GAAP shall have been made
therefor;
(e) Liens in favor of vendors, carriers, warehousemen, repairmen,
mechanics, workmen, materialmen, construction, or similar Liens arising by
operation of law in the ordinary course of business in respect of obligations
that are not yet due or that are being contested in good faith by appropriate
proceedings, provided such reserve as may be required by GAAP shall have been
made therefor;
(f) Liens to operators and non-operators under joint operating agreements
arising in the ordinary course of the business of the Borrower or the relevant
Subsidiary to secure amounts
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owing, which amounts are not yet due or are being contested in good faith by
appropriate proceedings, if such reserve as may be required by GAAP shall have
been made therefor;
(g) royalties, overriding royalties, net profits interests, production
payments, reversionary interests, calls on production, preferential purchase
rights and other burdens on or deductions from the proceeds of production, that
do not secure Debt for borrowed money and that are taken into account in
computing the net revenue interests and working interests of the Borrower
warranted in the Security Instruments;
(h) Liens arising in the ordinary course of business out of pledges or
deposits under workers' compensation laws, unemployment insurance, old age
pensions or other social security or retirement benefits, or similar legislation
or to secure public or statutory obligations of the Borrower or the relevant
Subsidiary;
(i) operating agreements, unitization and pooling agreements and orders,
farmout agreements, gas balancing agreements and other agreements, in each case
that are customary in the oil, gas and mineral production business and that are
entered into in the ordinary course of business, to the extent that any of the
foregoing referred to in this clause does not impair materially the use of the
Property covered thereby for the purposes for which such Property is held by the
Borrower or the relevant Subsidiary or impair materially the value of such
Property subject thereto;
(j) easements, rights-of-way, restrictions, and other similar encumbrances,
and minor defects in the chain of title that are customarily accepted in the oil
and gas financing industry, none of which interfere with the ordinary conduct of
the business of the Borrower or such Subsidiary or materially detract from the
value or use of the Property to which they apply;
(k) Liens securing Capital Leases permitted under Section 6.02(f), but only
on the Property covered under such lease;
(l) Liens on cash or securities of the Borrower or any of its relevant
Subsidiaries securing Debt permitted under Section 6.02(g); and
(m) Liens securing the payment of the Debt of the Borrower under the Note
Purchase Agreement, which Liens are subordinate in priority to the Liens
securing the Obligations in accordance with the Subordination Agreement or
otherwise on terms satisfactory to the Administrative Agent and the Lenders.
Section 6.02 Debts, Guaranties, and Other Obligations. The Borrower shall
not, and shall not permit any of its Subsidiaries (other than Foreign
Subsidiaries) to, create, assume, suffer to exist, or in any manner become or be
liable in respect of, any Debt except:
(a) Debt of the Borrower and its Subsidiaries under the Loan Documents;
(b) Debt in the form of obligations for the deferred purchase price of
Property or services incurred in the Borrower's or such Subsidiaries' ordinary
course of business which are not yet due and payable or are being contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been established;
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(c) Debt secured by the Liens permitted under paragraph (c) of Section 6.01
in an aggregate amount not to exceed $1,000,000 at any time;
(d) Debt under Hydrocarbon Hedge Agreements or Interest Hedge Agreements;
provided that (i) such agreements are entered into as a part of its normal
business operations as a risk management strategy and/or hedge against changes
resulting from market conditions related to the Borrower's or such Subsidiary's
operations, (ii) such agreements, collectively, cover less than 75% of the
developed Proven Reserves, (iii) the Borrower or the relevant Subsidiary can
only settle such agreements with physical deliveries of the commodities being
hedged thereby, (iv) such agreements are with counterparties that have a senior
unsecured, non-credit enhanced long-term credit rating of higher than BBB- as
rated by Standard & Poor's Ratings Group and higher than Baa3 as rated by
▇▇▇▇▇'▇ Investors Service, Inc., (v) such agreements shall not obligate the
Borrower or the relevant Subsidiary to any margin call requirements, (vi) the
obligations of the Borrower or the relevant Subsidiary under such agreements are
not secured, and (vii) the hedging transactions covered by such agreements shall
not be longer in duration than two years.
(e) Debt of the Borrower and such Subsidiaries existing on the date hereof
which is disclosed in Schedule 4.05, and any renewals or extensions (but not
increases) thereof;
(f) Debt under Capital Leases not to exceed $100,000 in the aggregate;
(g) Debt consisting of sureties or bonds provided to any Governmental
Authority or other Person and assuring payment of contingent liabilities of the
Borrower or any Subsidiary of the Borrower (other than Foreign Subsidiaries) in
connection with the operation of the Borrower's or the relevant Subsidiaries'
Oil and Gas Properties, including with respect to plugging, facility removal and
abandonment of such Oil and Gas Properties;
(h) Debt of the Borrower under the Note Purchase Agreement which is
subordinate to the Obligations pursuant to the Subordination Agreement.
(i) Debt of the Borrower or any such Subsidiaries expressly permitted under
Section 6.21 below.
Section 6.03 Agreements Restricting Liens and Distributions. The Borrower
shall not, nor shall it permit any of its Subsidiaries (other than Foreign
Subsidiaries) to, create, incur, assume or permit to exist any contract,
agreement or understanding (other than this Agreement and the Security
Instruments and the Note Purchase Agreement and the documents securing payment
of the Debt of the Borrower thereunder) which in any way prohibits or restricts
the granting, conveying, creation or imposition of any Lien on any of its
Property, whether now owned or hereafter acquired, to secure the Obligations or
restricts any such Subsidiary from paying dividends to the Borrower, or which
requires the consent of or notice to other Persons in connection therewith.
Section 6.04 Merger or Consolidation; Asset Sales. The Borrower shall not,
and shall not permit any of its Subsidiaries to, (a) merge or consolidate with
or into any other Person (other than the Borrower or any Subsidiary of the
Borrower (other than a Foreign Subsidiary))
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without the prior consent of all of the Lenders, or (b) Transfer any of its
Property; provided that any Foreign Subsidiary may merge or consolidate with or
into any other Foreign Subsidiary.
Section 6.05 Restricted Payments. The Borrower shall not, and shall not
permit any of its Subsidiaries to, declare or make a Restricted Payment or
return any capital to its stockholders or otherwise make any distribution of its
assets to its stockholders except for redemption of stock options held by
employees of the Borrower, as provided in the 1998 and 2000 stock option plans
of the Borrower; provided, however, the amount of stock so redeemed and held by
the Borrower shall not exceed at any one time in the aggregate more than the
number of shares that when multiplied by the then current price of the stock
exceeds $1,000,000.
Section 6.06 Investments. The Borrower shall not, and shall not permit any
of its Subsidiaries (other than Foreign Subsidiaries) to, make or permit to
exist any loans, advances, or capital contributions to, or make any investment
in (including the making of any Acquisition), or purchase or commit to purchase
any stock or other securities or evidences of indebtedness of or interests in
any Person or any Oil and Gas Properties or activities related to Oil and Gas
Properties, except:
(a) Liquid Investments;
(b) trade and customer accounts receivable which are for goods furnished or
services rendered in the ordinary course of business and are payable in
accordance with customary trade terms;
(c) investments by the Borrower and its relevant Subsidiaries in direct
ownership interests in additional Oil and Gas Properties and gas gathering
systems and other facilities related thereto; provided that, the amount of any
such investments permitted by this clause (d) may not exceed $5,000,000 during
any six-month period between every other scheduled Borrowing Base
redeterminations (except that such $5,000,000 limit may be exceeded in
connection with any proposed investment to the extent of any unused availability
that exists under the Borrowing Base on the date such proposed investment is to
be made);
(d) loans, advances, or capital contributions to, or investment in, or
purchases or commitments to purchase any stock or other securities or evidences
of indebtedness of or interests in any Person, specified in the attached
Schedule 6.06; provided that, the respective amounts of such loans, advances,
capital contributions, investments, purchases and commitments shall not be
increased;
(e) creation of any additional Subsidiaries in compliance with Section
6.20;
(f) other investments, loans or advances not otherwise permitted by this
Section 6.06, (but not including any investments, loans or advances permitted by
Section 6.21) and in or to a Person that is not a Subsidiary of the Borrower and
in an aggregate amount not to exceed $250,000 at any time; and
(g) loans, advances, guaranties, capital contributions, or any investment
expressly permitted under Section 6.21 below.
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Section 6.07 Affiliate Transactions. The Borrower shall not, and shall not
permit any of its Subsidiaries (other than Foreign Subsidiaries) to, directly or
indirectly, enter into or permit to exist any transaction or series of
transactions (including the purchase, sale, lease or exchange of Property, the
making of any investment, the giving of any guaranty, the assumption of any
obligation or the rendering of any service) with any of their Affiliates
(including Foreign Subsidiaries) unless such transaction or series of
transactions is on terms no less favorable to the Borrower or the relevant
Subsidiary, as applicable, than those that could be obtained in a comparable
arm's length transaction with a Person that is not such an Affiliate.
Section 6.08 Compliance with ERISA. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, (a) engage in, or
permit any Subsidiary of such Person or ERISA Affiliate to engage in, any
transaction in connection with which the Borrower, any Subsidiary of the
Borrower, or any ERISA Affiliate could be subjected to either a civil penalty
assessed pursuant to section 502(c), (i) or (l) of ERISA or a tax imposed by
Chapter 43 of Subtitle D of the Code; (b) terminate, or permit any such
Subsidiary or ERISA Affiliate to terminate, any Plan in a manner, or take any
other action with respect to any Plan, which could result in any liability to
the Borrower, any such Subsidiary or any ERISA Affiliate to the PBGC; (c) fail
to make, or permit any such Subsidiary or ERISA Affiliate to fail to make, full
payment when due of all amounts which, under the provisions of any Plan,
agreement relating thereto or applicable law, the Borrower, any such Subsidiary
or any ERISA Affiliate is required to pay as contributions thereto; (d) permit
to exist, or allow any such Subsidiary or ERISA Affiliate to permit to exist,
any accumulated funding deficiency within the meaning of Section 302 of ERISA or
section 412 of the Code, whether or not waived, with respect to any Plan; (e)
permit, or allow any such Subsidiary or ERISA Affiliate to permit, the actuarial
present value of the benefit liabilities (as "actuarial present value of the
benefit liabilities" shall have the meaning specified in section 4041 of ERISA)
under any Plan maintained by the Borrower, any such Subsidiary or any ERISA
Affiliate which is regulated under Title IV of ERISA to exceed the current value
of the assets (computed on a plan termination basis in accordance with Title IV
of ERISA) of such Plan allocable to such benefit liabilities; (f) contribute to
or assume an obligation to contribute to, or permit any such Subsidiary or ERISA
Affiliate to contribute to or assume an obligation to contribute to, any
Multiemployer Plan; (g) acquire, or permit any Subsidiary or ERISA Affiliate to
acquire, an interest in any Person that causes such Person to become an ERISA
Affiliate with respect to the Borrower, any such Subsidiary or any ERISA
Affiliate if such Person sponsors, maintains or contributes to, or at any time
in the six-year period preceding such acquisition has sponsored, maintained, or
contributed to, (1) any Multiemployer Plan, or (2) any other Plan that is
subject to Title IV of ERISA under which the actuarial present value of the
benefit liabilities under such Plan exceeds the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities; (h) incur, or permit any such
Subsidiary or ERISA Affiliate to incur, a liability to or on account of a Plan
under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; (i) contribute to
or assume an obligation to contribute to, or permit any such Subsidiary or ERISA
Affiliate to contribute to or assume an obligation to contribute to, any
employee welfare benefit plan, as defined in section 3(1) of ERISA, including
any such plan maintained to provide benefits to former employees of such
entities, that may not be terminated by such entities in their sole discretion
at any time without any material liability; (j) amend or permit any such
Subsidiary or ERISA Affiliate to amend, a Plan resulting in an increase in
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current liability such that the Borrower, any such Subsidiary or any ERISA
Affiliate is required to provide security to such Plan under section 401(a)(29)
of the Code; or (k) permit to exist any occurrence of any Reportable Event (as
defined in Title IV of ERISA), or any other event or condition, which presents a
material (in the opinion of the Majority Lenders) risk of such a termination by
the PBGC of any Plan.
Section 6.09 Sale-and-Leaseback. The Borrower shall not, nor shall it
permit any of its Subsidiaries (other than Foreign Subsidiaries) to, sell or
transfer to a Person any Property, whether now owned or hereafter acquired, if
at the time or thereafter the Borrower or such Subsidiary shall lease as lessee
such property or any part thereof or other Property which the Borrower or such
Subsidiary intends to use for substantially the same purpose as the Property
sold or transferred.
Section 6.10 Change of Business. The Borrower shall not, nor shall it
permit any of its Subsidiaries (other than Foreign Subsidiaries) to, make any
material change in the character of its business as an independent oil and gas
exploration and production company, nor will the Borrower or any such Subsidiary
operate or carry on business in any jurisdiction other than the United States,
including the Gulf of Mexico.
Section 6.11 Organizational Documents, Name Change. The Borrower shall not,
nor shall it permit any of its Subsidiaries (other than Foreign Subsidiaries)
to, amend, supplement, modify or restate their articles or certificate of
incorporation and bylaws or other equivalent organizational documents without
prior written notice to, and prior consent of, the Administrative Agent, which
consent shall not be unreasonably withheld provided that such amendments,
supplements, modifications or restatements are in form and substance reasonably
satisfactory to the Administrative Agent. The Borrower shall not, nor shall it
permit any of its Subsidiaries (other than Foreign Subsidiaries) to, change its
name without giving the Administrative Agent reasonable prior notice thereof.
The Borrower agrees that at any time, at the Borrower's expense, the Borrower
will, or will cause any of its Subsidiaries (other than Foreign Subsidiaries)
to, promptly execute and deliver all further instruments and documents, and take
all further action, that may be reasonably necessary or that the Administrative
Agent or any Lender may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.
Section 6.12 Gas Imbalances, Take-or-Pay or Other Prepayments. The Borrower
shall not, nor shall it permit any of its Subsidiaries (other than Foreign
Subsidiaries) to, allow gas imbalances, take-or-pay or other prepayments with
respect to the Oil and Gas Properties of the Borrower or any such Subsidiary
which would require the Borrower or any such Subsidiary to deliver in the
aggregate two percent (2%) or more of their respective Hydrocarbons produced on
a monthly basis from such Oil and Gas Properties at some future time without
then or thereafter receiving full payment therefor.
Section 6.13 Current Ratio. The Borrower shall not permit the ratio of (i)
its consolidated current assets as of the end of any fiscal quarter (including
any unused portion of the Borrowing Base and including any funds available to
the Foreign Subsidiaries under a committed credit facility, but limited to the
aggregate amount included for the relevant Foreign
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Subsidiaries' accounts payable in clause (ii) of this Section 6.13) to (ii) its
consolidated current liabilities (excluding any current maturities of long-term
Debt) as of the end of the relevant fiscal quarter to be less than 1.0 to 1.0.
For purposes of this calculation, the ▇▇▇▇-to-market portion of any Hydrocarbon
Hedge Agreement or Interest Hedge Agreement shall be excluded from the
calculation of both consolidated current assets and consolidated current
liabilities.
Section 6.14 Interest Coverage Ratio. The Borrower shall not permit the
ratio, as of the last day of any fiscal quarter (calculated quarterly at the end
of each fiscal quarter), of (i) its EBITDA (for the immediately preceding four
fiscal quarter period then ended) minus $12,000,000 to (ii) Interest Expense for
the Borrower and its consolidated Subsidiaries for such four fiscal quarter
period, to be less than 3.0 to 1.0.
Section 6.15 Sale or Discount of Receivables. The Borrower shall not, nor
shall it permit any of its Subsidiaries (other than Foreign Subsidiaries) to,
discount or sell (with or without recourse) any of its notes receivable or
accounts receivable.
Section 6.16 Debt Coverage Ratio. The Borrower shall not permit the ratio
of, as of the end of each fiscal quarter (calculated quarterly at the end of
each fiscal quarter) of (i) the Debt of the Borrower and its consolidated
Subsidiaries (excluding Foreign Subsidiaries), less cash on hand exceeding
$10,000,000, to (ii) EBITDA, minus interest income of the relevant entities for
the immediately preceding four fiscal quarter period then ended, to be greater
than 3.0 to 1.0. For purposes of this calculation, the ▇▇▇▇-to-market portion of
any Hydrocarbon Hedge Agreement or Interest Hedge Agreement shall be excluded
from the calculation of both Debt and EBITDA.
Section 6.17 Note Purchase Agreement.
(a) Guaranties. The Borrower shall not permit any of its Subsidiaries to
guarantee the obligations, liabilities and indebtedness created under or
evidenced by the Note Purchase Agreement and any other documents executed in
connection therewith (whether a guaranty of payment, collection or otherwise),
unless such guaranty is subordinate to a guaranty by such Subsidiary of the
Obligations in favor of the Administrative Agent pursuant to documentation in
form and substance satisfactory to the Administrative Agent.
(b) Payment and Modification. The Borrower shall not make any payments on
the obligations, liabilities and indebtedness created under or evidenced by the
Note Purchase Agreement and any other documents executed in connection
therewith, except as permitted pursuant to the Subordination Agreement. Further,
the Borrower shall not amend, supplement, restate or otherwise modify, in any
material respect, the Note Purchase Agreement or any other document executed in
connection therewith without the prior written consent of the Majority Lenders.
Section 6.18 Limitation on Leases. The Borrower shall not, nor shall it
permit any of its Subsidiaries (other than Foreign Subsidiaries) to create,
incur, assume or permit to exist any obligation for the payment of rent or hire
of Property of any kind whatsoever (real or personal including capital leases,
but excluding leases of Hydrocarbon Interests), under leases or lease agreements
which would cause the aggregate amount of all payments made by the Borrower and
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all such Subsidiaries pursuant to all such leases or lease agreements to exceed
$250,000 in any period of twelve consecutive calendar months during the life of
such leases.
Section 6.19 Use of Proceeds; Letters of Credit. The Borrower will not
permit the proceeds of any Advance or any Letter of Credit to be used for any
purpose other than those permitted by Section 5.09. The Borrower will not engage
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U). Neither the Borrower nor any
Person acting on behalf of the Borrower has taken or shall take, nor permit any
of the Borrower's Subsidiaries to take any action which might cause any of the
Loan Documents to violate Regulation T, U or X or any other regulation of the
Board of Governors of the Federal Reserve System or to violate Section 7 of the
Securities Exchange Act of 1934, as amended, or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect, including the use of the proceeds of any Advance or Letters of Credit to
purchase or carry any margin stock in violation of Regulation T, U or X.
Section 6.20 Additional Subsidiaries. The Borrower shall not, nor shall it
permit any of its Subsidiaries (other than Foreign Subsidiaries) to, create or
acquire any additional Subsidiaries without (a) the prior written consent of the
Administrative Agent and the Majority Lenders, (b) such new Subsidiary (other
than Foreign Subsidiaries) executing and delivering to the Administrative Agent,
at its request, a Pledge Agreement, a Security Agreement and a Mortgage, and
such other Security Instruments as the Agent or the Majority Lenders may
reasonably request, and (c) any certificates, opinions of counsel, title
opinions or other documents as the Administrative Agent may reasonably request.
Section 6.21 Foreign Subsidiaries. Notwithstanding anything to the contrary
contained herein, the Borrower shall not, nor shall it permit any of its
Subsidiaries (other than Foreign Subsidiaries) to, incur any Debt in respect of,
make any loans, advances, or capital contributions to, make any investment in
(including the making of any Acquisition), or purchase or commit to purchase any
stock or other securities or evidences of indebtedness of or interests in, any
Foreign Subsidiary (collectively, the "Foreign Subsidiary Investments") in an
aggregate amount exceeding $15,000,000 at any time; provided that at least
$10,000,000 of such Foreign Subsidiary Investments shall be evidenced by
promissory notes issued by the relevant Foreign Subsidiary payable to the order
of the Borrower and collaterally assigned to, and held in the possession of, the
Administrative Agent. For the avoidance of doubt (a) the aggregate amount of the
Foreign Subsidiary Investments permitted under this Agreement, whether under
this Section 6.21 or under any other Section of this Agreement, shall not exceed
$15,000,000 and (b) "Foreign Subsidiary Investments" include any sureties or
bonds provided to any Governmental Authority or other Person and assuring
payment of contingent liabilities of a Foreign Subsidiary in connection with the
operation of such Foreign Subsidiary's Oil and Gas Properties, including with
respect to plugging, facility removal and abandonment of such Oil and Gas
Properties).
ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
Section 7.01 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" under any Loan Document:
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(a) Payment. The Borrower shall fail to pay when due any principal,
interest, fees, reimbursements, indemnifications, or other amounts payable
hereunder, under the Notes, or under any other Loan Document;
(b) Representation and Warranties. Any representation or warranty made or
deemed to be made in accordance with any provision hereof (i) by the Borrower or
any Subsidiary in this Agreement or in any other Loan Document or, (ii) by the
Borrower or any Subsidiary in connection with this Agreement or any other Loan
Document, shall prove to have been incorrect in any material respect when made
or deemed to be made in accordance with any provision hereof;
(c) Covenant Breaches. The Borrower or any of its Subsidiaries (other than
Foreign Subsidiaries) shall fail to (i) perform or observe any covenant
contained in Section 5.02(a), Section 5.12 or Article VI of this Agreement or
(ii) perform or observe any other term or covenant set forth in this Agreement
or in any other Loan Document which is not covered by clause (i) above or any
other provision of this Section 7.01 if such failure shall remain unremedied for
30 days after the occurrence of such breach or failure;
(d) Cross-Defaults. (i) The Borrower or any of its Subsidiaries (other than
Foreign Subsidiaries) shall fail to pay any principal of or premium or interest
on its Debt which is outstanding in a principal amount of at least $250,000
individually or when aggregated with all such Debt of the Borrower or such
Subsidiaries so in default (but excluding Debt evidenced by the Notes) when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; (ii) any other event shall occur or condition
shall exist under any agreement or instrument relating to such Debt which is
outstanding in a principal amount of at least $5,000,000 individually or when
aggregated with all such Debt of the Borrower, such Subsidiary, or such
Guarantor so in default, and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or (iii) any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) Insolvency. The Borrower or any of its Subsidiaries (other than Foreign
Subsidiaries) shall generally not pay its debts as such debts become due, or
shall admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower, any of its Subsidiaries (other than
Foreign Subsidiaries), or any Guarantor seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
Property and, in the case of any such proceeding instituted against the
Borrower, any such Subsidiary or any such Guarantor either such proceeding shall
remain undismissed for a period of 60 days or any of the actions sought in such
proceeding shall occur; or the Borrower, any of
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its Subsidiaries (other than Foreign Subsidiaries), or any Guarantor shall take
any corporate action to authorize any of the actions set forth above in this
paragraph (e); paragraph (e);
(f) Judgments. Any judgment or order for the payment of money in excess of
$500,000 shall be rendered against the Borrower or any of its Subsidiaries
(other than Foreign Subsidiaries) and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect;
(g) Termination Events. Any Termination Event with respect to a Plan shall
have occurred, and, 30 days after notice thereof shall have been given to the
Borrower by the Administrative Agent, (i) such Termination Event shall not have
been corrected and (ii) the then present value of such Plan's vested benefits
exceeds the then current value of assets accumulated in such Plan by more than
$500,000 (or in the case of a Termination Event involving the withdrawal of a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall exceed such
amount);
(h) Plan Withdrawals. The Borrower or any member of the Controlled Group as
employer under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability in an annual amount exceeding
$500,000;
(i) Change of Control. The Borrower shall have discontinued its usual
business or a Change in Control shall have occurred;
(j) Borrowing Base. Any failure to provide any Borrowing Base deficiency
election notice or to cure any Borrowing Base deficiency in accordance with
Section 2.05;
(k) Loan Documents. Any provision of any Loan Document shall for any reason
cease to be valid and binding on the Borrower or a Guarantor or the Borrower or
such Guarantor shall so state in writing;
(l) Security Instruments. (i) the Administrative Agent shall fail to have
an Acceptable Security Interest in any portion of the Collateral or (ii) any
Security Instrument shall at any time and for any reason cease to create the
Lien on the Property purported to be subject to such agreement in accordance
with the terms of such agreement, or cease to be in full force and effect, or
shall be contested by the Borrower or any Subsidiary party thereto;
(m) Potential Failure of Title. The title of the Borrower or any of its
Subsidiaries to any of the Oil and Gas Properties subject to the Mortgages, or
any material part thereof, shall become the subject matter of litigation before
any Governmental Authority or arbitrator which could reasonably be expected to
result in a Material Adverse Change with respect to the Borrower's or such
Subsidiary's title to such Oil and Gas Properties;
(n) Material Adverse Change. An event resulting in a Material Adverse
Change shall have occurred;
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(o) Casualty. Loss, theft, substantial damage or destruction of a material
portion of the Collateral the subject of any Security Instrument not fully
covered by insurance, except for deductibles and allowing for the depreciated
value of such Collateral shall have occurred; or
(p) Note Purchase Agreement. An event of default shall have occurred under
the Note Purchase Agreement.
Section 7.02 Optional Acceleration of Maturity. If any Event of Default
(other than an Event of Default pursuant to paragraph (e) of Section 7.01) shall
have occurred and be continuing, then, and in any such event,
(a) the Administrative Agent (i) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
obligation of each Lender and the Issuing Lender to make extensions of credit
hereunder, including making Advances and issuing Letters of Credit, to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Majority Lenders, by notice to the
Borrower, declare all principal, interest, fees, reimbursements,
indemnifications, and all other amounts payable under this Agreement, the Notes,
and the other Loan Documents to be forthwith due and payable, whereupon all such
amounts shall become and be forthwith due and payable in full, without notice of
intent to demand, demand, presentment for payment, notice of nonpayment,
protest, notice of protest, grace, notice of dishonor, notice of intent to
accelerate, notice of acceleration, and all other notices, all of which are
hereby expressly waived by the Borrower;
(b) the Borrower shall, on demand of the Administrative Agent at the
request or with the consent of the Majority Lenders, deposit with the
Administrative Agent into the Cash Collateral Account an amount of cash equal to
the Letter of Credit Exposure as security for the Obligations; and
(c) the Administrative Agent shall at the request of, or may with the
consent of, the Majority Lenders proceed to enforce its rights and remedies
under the Security Instruments, the Guaranties, and any other Loan Document for
the ratable benefit of the Lenders by appropriate proceedings.
Section 7.03 Automatic Acceleration of Maturity. If any Event of Default
pursuant to paragraph (e) of Section 7.01 shall occur,
(a) (i) the obligation of each Lender and the Issuing Lender to make
extensions of credit hereunder, including making Advances and issuing Letters of
Credit, shall terminate, and (ii) all principal, interest, fees, reimbursements,
indemnifications, and all other amounts payable under this Agreement, the Notes,
and the other Loan Documents shall become and be forthwith due and payable in
full, without notice of intent to demand, demand, presentment for payment,
notice of nonpayment, protest, notice of protest, grace, notice of dishonor,
notice of intent to accelerate, notice of acceleration, and all other notices,
all of which are hereby expressly waived by the Borrower;
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(b) the Borrower shall deposit with the Administrative Agent into the Cash
Collateral Account an amount of cash equal to the outstanding Letter of Credit
Exposure as security for the Obligations; and
(c) the Administrative Agent shall at the request of, or may with the
consent of, the Majority Lenders proceed to enforce its rights and remedies
under the Security Instruments, the Guaranties, and any other Loan Document for
the ratable benefit of the Lenders by appropriate proceedings.
Section 7.04 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent, the Issuing
Lender and each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Administrative Agent, the
Issuing Lender or such Lender to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement, the Notes held by the Administrative Agent, the
Issuing Lender or such Lender, and the other Loan Documents, irrespective of
whether or not the Administrative Agent, the Issuing Lender or such Lender shall
have made any demand under this Agreement, such Notes, or such other Loan
Documents, and although such obligations may be unmatured. The Administrative
Agent, the Issuing Lender and each Lender agrees to notify the Borrower promptly
after any such set-off and application made by the Administrative Agent, the
Issuing Lender or such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Administrative Agent, the Issuing Lender and each Lender under this Section 7.04
are in addition to any other rights and remedies (including other rights of
set-off) which the Administrative Agent, the Issuing Lender or such Lender may
have.
Section 7.05 Non-exclusivity of Remedies. No remedy conferred upon the
Administrative Agent, the Issuing Lender and the Lenders is intended to be
exclusive of any other remedy, and each remedy shall be cumulative of all other
remedies existing by contract, at law, in equity, by statute or otherwise.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER
Section 8.01 Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof and of the other Loan Documents,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement or any other Loan Document
(including enforcement or collection of the Notes), the Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
and such instructions shall be binding upon all Lenders and all holders of
Notes; provided, however, that the Administrative Agent shall not be required to
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take any action which exposes the Administrative Agent to personal liability or
which is contrary to this Agreement, any other Loan Document, or applicable law.
Section 8.02 Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents, or employees
shall be liable for any action taken or omitted to be taken (INCLUDING THE
ADMINISTRATIVE AGENT'S OWN NEGLIGENCE) by it or them under or in connection with
this Agreement or the other Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Administrative Agent; (b) may consult with legal counsel (including counsel
for the Borrower), independent public accountants, and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants, or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties, or representations
made in or in connection with this Agreement or the other Loan Documents; (d)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
other Loan Document on the part of the Borrower or its Subsidiaries or to
inspect the property (including the books and records) of the Borrower or its
Subsidiaries; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency, or value of this
Agreement or any other Loan Document; and (f) shall incur no liability under or
in respect of this Agreement or any other Loan Document by acting upon any
notice, consent, certificate, or other instrument or writing (which may be by
telecopier or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
Section 8.03 The Administrative Agent and Its Affiliates. With respect to
its Commitments, the Advances made by it and the Notes issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any other Lender and may exercise the same as though it were not the
Administrative Agent. The term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower or any of its Subsidiaries, and any Person
who may do business with or own securities of the Borrower or any such
Subsidiary, all as if the Administrative Agent were not an agent hereunder and
without any duty to account therefor to the Lenders.
Section 8.04 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the Financial Statements and the Interim Financial
Statements and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it shall, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.
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Section 8.05 Indemnification. THE LENDERS SEVERALLY AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT AND THE ISSUING LENDER AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS (TO THE EXTENT NOT
REIMBURSED BY THE BORROWER), ACCORDING TO THEIR RESPECTIVE PRO RATA SHARES FROM
AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT AND THE ISSUING LENDER IN ANY WAY RELATING TO OR ARISING
OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT
OR THE ISSUING LENDER UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (INCLUDING
THE ADMINISTRATIVE AGENT'S AND THE ISSUING LENDER'S OWN NEGLIGENCE), AND
INCLUDING ENVIRONMENTAL LIABILITIES, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR
ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS RESULTING FROM THE
ADMINISTRATIVE AGENT'S OR THE ISSUING LENDER'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE
THE ADMINISTRATIVE AGENT AND THE ISSUING LENDER PROMPTLY UPON DEMAND FOR ITS
RATABLE SHARE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY
THE ADMINISTRATIVE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION,
DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER
THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, TO THE EXTENT THAT THE ADMINISTRATIVE AGENT OR THE ISSUING LENDER IS
NOT REIMBURSED FOR SUCH BY THE BORROWER.
Section 8.06 Successor Administrative Agent and Issuing Lender. The
Administrative Agent or the Issuing Lender may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may be removed at any
time with or without cause by the Majority Lenders upon receipt of written
notice from the Majority Lenders to such effect. Upon receipt of notice of any
such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Administrative Agent or Issuing Lender with, if any Event of
Default has not occurred and is not continuing, the consent of the Borrower,
which consent shall not be unreasonably withheld. If no successor Administrative
Agent or Issuing Lender shall have been so appointed by the Majority Lenders
with the consent of the Borrower, and shall have accepted such appointment,
within 30 days after the retiring Administrative Agent's or Issuing Lender's
giving of notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent or Issuing Lender, then the retiring Administrative Agent
or Issuing Lender may, on behalf of the Lenders and the Borrower, appoint a
successor Administrative Agent or Issuing Lender, which shall be, in the case of
a successor agent, a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
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surplus of at least $500,000,000.00 and, in the case of the Issuing Lender, a
Lender. Upon the acceptance of any appointment as Administrative Agent or
Issuing Lender by a successor Administrative Agent or Issuing Lender, such
successor Administrative Agent or Issuing Lender shall thereupon succeed to and
become vested with all the rights, powers, privileges, and duties of the
retiring Administrative Agent or Issuing Lender, and the retiring Administrative
Agent or Issuing Lender shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents, except that the retiring
Issuing Lender shall remain the Issuing Lender with respect to any Letters of
Credit outstanding on the effective date of its resignation or removal and the
provisions affecting the Issuing Lender with respect to such Letters of Credit
shall inure to the benefit of the retiring Issuing Lender until the termination
of all such Letters of Credit. After any retiring Administrative Agent's or
Issuing Lender's resignation or removal hereunder as Administrative Agent or
Issuing Lender, the provisions of this Article VIII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent or Issuing Lender under this Agreement and the other Loan Documents.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Amendments, Etc. No amendment or waiver of any provision of
this Agreement, the Notes, or any other Loan Document, nor consent to any
departure by the Borrower or any Subsidiary of the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Majority Lenders and the Borrower, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver, or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (a) waive any of
the conditions specified in Section 3.01, (b) increase the Borrowing Base or the
Commitments of the Lenders, (c) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder or under any other Loan
Document, (d) postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder or extend
the Maturity Date or the Commitment Termination Date, (e) change the percentage
of Lenders which shall be required for the Lenders or any of them to take any
action hereunder or under any other Loan Document, (f) amend Section 2.11 or
this Section 9.01, (g) amend the definition of "Majority Lenders," (h) release
any Guarantor from its obligations under any Guaranty, (i) permit the Borrower
or any Subsidiary to enter into any merger or consolidation with or into any
other Person except as permitted under Section 6.04(a), or amend Section
6.04(a), or (j) release any Collateral securing the Obligations, except for
releases of Collateral sold as permitted by this Agreement; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent or the Issuing Lender in addition to the
Lenders required above to take such action, affect the rights or duties of the
Administrative Agent or the Issuing Lender, as the case may be, under this
Agreement or any other Loan Document.
Section 9.02 Notices, Etc. All notices and other communications shall be in
writing (including telecopy or telex) and mailed by certified mail, return
receipt requested, telecopied, telexed, hand delivered, or delivered by a
nationally recognized overnight courier, at the address for the appropriate
party specified in Schedule 1 or at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall,
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when so mailed, telecopied, telexed, or hand delivered or delivered by a
nationally recognized overnight courier, be effective when received if mailed,
when telecopy transmission is completed, when confirmed by telex answer-back, or
when delivered by such messenger or courier, respectively, except that notices
and communications to the Administrative Agent pursuant to Article II or VIII
shall not be effective until received by the Administrative Agent.
Section 9.03 No Waiver; Remedies. No failure on the part of any Lender, the
Administrative Agent, or the Issuing Lender to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 9.04 Costs and Expenses. The Borrower agrees to pay on demand (a)
all reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, and amendment of this Agreement, the Notes, the Guaranties, and
the other Loan Documents =, including the reasonable fees and out-of-pocket
expenses of counsel for the Administrative Agent, and (b) all out-of-pocket
costs and expenses, if any, of the Administrative Agent, the Issuing Lender, and
each Lender (including reasonable counsel fees and expenses of the
Administrative Agent, the Issuing Lender, and each Lender) in connection with
the enforcement (whether through negotiations, legal proceedings, or otherwise)
of this Agreement, the Notes, the Guaranties, and the other Loan Documents.
Section 9.05 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent, and when
the Administrative Agent shall have, as to each Lender, either received a
counterpart hereof executed by such Lender or been notified by such Lender that
such Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent, the Issuing Lender, and
each Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights or delegate its duties
under this Agreement or any interest in this Agreement without the prior written
consent of each Lender.
Section 9.06 Lender Assignments and Participations.
(a) Assignments. Any Lender may assign to one or more banks or other
entities all or any portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments, the Advances owing to it, the
Notes held by it, and the participation interest in the Letter of Credit
Obligations held by it); provided, however, that (i) each such assignment shall
be of a constant, and not a varying, percentage of such Lender's rights and
obligations assigned under this Agreement and shall be an equal percentage with
respect to both its obligations owing in respect of the Commitments (and the
related Advances and Letters of Credit), (ii) the amount of the Commitments and
Advances of such Lender being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall be, if to an entity other than a Lender, not less than
$5,000,000.00 and shall be an integral multiple of $1,000,000.00 in excess
thereof, (iii) each such assignment shall be to an Eligible Assignee, (iv) the
parties to each such assignment shall execute and deliver to the
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Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with the Notes subject to such assignment,
and (v) each Eligible Assignee (other than the Eligible Assignee of the
Administrative Agent) shall pay to the Administrative Agent a $3,500
administrative fee. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least three Business Days after the execution
thereof, (A) the assignee thereunder shall be a party hereto for all purposes
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and (B) such Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of such Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto).
(b) Term of Assignments. By executing and delivering an Assignment and
Acceptance, the Lender thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency of
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or its
Subsidiaries or the performance or observance by the Borrower or its
Subsidiaries of any of their obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
Financial Statements and Interim Financial Statements referred to in Section
4.05 and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Administrative Agent, such Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(c) The Register. The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent, the Issuing Lender,
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of
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this Agreement. The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Procedures. Upon its receipt of an Assignment and Acceptance executed
by a Lender and an Eligible Assignee, together with the Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of the attached Exhibit A,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Notes (A) if such Eligible Assignee has acquired a Commitment, a new Note to the
order of such Eligible Assignee in an amount equal to the Commitment assumed by
it pursuant to such Assignment and Acceptance and (B) if such Lender has
retained any Commitment hereunder, a new Note to the order of such Lender in an
amount equal to the Commitment retained by it hereunder. Such new Notes shall be
dated the effective date of such Assignment and Acceptance and shall otherwise
be in substantially the form of the attached Exhibit E.
(e) Participations. Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitments, the
Advances owing to it, its participation interest in the Letter of Credit
Obligations, and the Notes held by it); provided, however, that (i) such
Lender's obligations under this Agreement (including its Commitments to the
Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Notes for all purposes of
this Agreement, (iv) the Borrower, the Administrative Agent, and the Issuing
Lender and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement, and (v) such Lender shall not require the participant's consent to
any matter under this Agreement, except for change in the principal amount of
the Notes, reductions in fees or interest, releasing all or substantially all of
any collateral, permitting the Borrower or any Subsidiary to enter into any
merger or consolidation with or into any other, postponement of any date fixed
for any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, or extensions of the Maturity Date or the Commitment
Termination Date. The Borrower hereby agrees that participants shall have the
same rights under Sections 2.12, 2.13, 2.14(c), and 9.07 as a Lender to the
extent of their respective participations.
Section 9.07 Indemnification. THE BORROWER SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT, THE LENDERS, THE ISSUING LENDER, AND EACH AFFILIATE
THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM,
AND DISCHARGE, RELEASE, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL
LOSSES, LIABILITIES, CLAIMS, OR DAMAGES WHICH MAY BE IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST THEM IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR
ANY ACTION TAKEN OR OMITTED BY THEM UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT (INCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE
INCURRED BY REASON OF THE PERSON BEING INDEMNIFIED'S OWN NEGLIGENCE OR
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STRICT LIABILITY) AND INCLUDING ENVIRONMENTAL LIABILITIES, BUT EXCLUDING ANY
SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSES INCURRED BY REASON OF THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
Section 9.08 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 9.09 Survival of Representations, Etc. All representations and
warranties contained in this Agreement or made in writing by or on behalf of the
Borrower in connection herewith shall survive the execution and delivery of this
Agreement and the Loan Documents, the making of the Advances and any
investigation made by or on behalf of the Lenders, none of which investigations
shall diminish any Lender's right to rely on such representations and
warranties. All obligations of the Borrower provided for in Sections 2.12, 2.13,
2.14(c), 9.04, and 9.07 and all of the obligations of the Lenders in Section
8.05 shall survive any termination of this Agreement and repayment in full of
the Obligations.
Section 9.10 Severability. In case one or more provisions of this Agreement
or the other Loan Documents shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality, and enforceability of
the remaining provisions contained herein or therein shall not be affected or
impaired thereby.
Section 9.11 Business Loans. The Borrower warrants and represents that the
Loans evidenced by the Notes are and shall be for business, commercial,
investment, or other similar purposes and not primarily for personal, family,
household, or agricultural use, as such terms are used in Chapter One ("Chapter
One") of the Texas Credit Code. At all such times, if any, as Chapter One shall
establish a Maximum Rate, the Maximum Rate shall be the "indicated rate ceiling"
(as such term is defined in Chapter One) from time to time in effect.
Section 9.12 Governing Law; Submission to Jurisdiction. This Agreement, the
Notes and the other Loan Documents shall be governed by, and construed and
enforced in accordance with, the laws of the State of Texas. Without limiting
the intent of the parties set forth above, Chapter 346 of the Texas Finance
Code, as amended (relating to revolving loans and revolving tri-party accounts
(formerly Tex. Rev. Civ. Stat. ▇▇▇. Art. ▇▇▇▇, ▇▇. 15)), shall not apply to this
Agreement, the Notes, or the transactions contemplated hereby and (b) to the
extent that any Lender may be subject to Texas law limiting the amount of
interest payable for its account, such Lender shall utilize the indicated
(weekly) rate ceiling from time to time in effect. Each Letter of Credit shall
be governed by the Uniform Customs and Practices for Documentary Credits,
International Chamber of Commerce Publication No. 500 (1993 version). The
Borrower hereby irrevocably submits to the jurisdiction of any Texas state or
federal court sitting in Dallas, Texas in any action or proceeding arising out
of or relating to this Agreement or the other Loan Documents, and the Borrower
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such court. The Borrower hereby
unconditionally and irrevocably waives, to the fullest extent it may effectively
do so, any right it may have to the defense of an inconvenient forum to the
maintenance of such action or proceeding. The
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Borrower hereby agrees that service of copies of the summons and complaint and
any other process which may be served in any such action or proceeding may be
made by mailing or delivering a copy of such process to the Borrower at its
address set forth in this Agreement. The Borrower agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Section shall affect the rights of any Lender to serve
legal process in any other manner permitted by the law or affect the right of
any Lender to bring any action or proceeding against the Borrower or its
Property in the courts of any other jurisdiction.
Section 9.13 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS, THE ISSUING
LENDER AND THE ADMINISTRATIVE AGENT HEREBY ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED BY AND HAVE CONSULTED WITH COUNSEL OF THEIR CHOICE, AND HEREBY
KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE ANY AND ALL RIGHT
TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
Section 9.14 Confidentiality. In the event that the Borrower provides to
the Administrative Agent or the Lenders written confidential information
belonging to the Borrower and the Borrower clearly denominates such information
in writing as "confidential", the Administrative Agent and the Lenders shall
thereafter maintain such information in confidence in accordance with the
standards of care and diligence that each utilizes in maintaining its own
confidential information. This obligation of confidence shall not apply to such
portions of the information which (i) are in the public domain, (ii) hereafter
become part of the public domain without the Administrative Agent or the Lenders
breaching their obligation of confidence to the Borrower, (iii) are previously
known by the Administrative Agent or the Lenders from some source other than the
Borrower, (iv) are hereafter developed by the Administrative Agent or the
Lenders without using the Borrower's information, (v) are hereafter obtained by
or available to the Administrative Agent or the Lenders from a third party who,
to the actual knowledge of the Administrative Agent or such Lender, owes no
obligation of confidence to the Borrower with respect to such information or
through any other means other than through disclosure by the Borrower, (vi) are
disclosed with the Borrower's consent, (vii) must be disclosed either pursuant
to any Requirement of Law or to Persons regulating the activities of the
Administrative Agent or the Lenders, or (viii) as may be required by law or
regulation or order of any Governmental Authority in any judicial, arbitration
or governmental proceeding. Further, the Administrative Agent or a Lender may
disclose any such information to any other Lender, any independent petroleum
engineers or consultants, any potential transferees of their interests under
this Agreement or any other Loan Documents, any independent certified public
accountants, any market data collectors and other similar service providers to
the lending industry, any service providers to the Administrative Agent and the
Lenders in connection with the administration and management of this Agreement
and the other Loan Documents, any legal counsel employed by such Person in
connection with this Agreement or any other Loan Document, including the
enforcement or exercise of all rights and remedies thereunder, or any assignee
or participant (including prospective assignees and participants) in the
Advances; provided, however, that the Administrative Agent or the Lenders shall
receive a confidentiality agreement from the Person to whom such information is
disclosed such that said Person shall have the same obligation to
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maintain the confidentiality of such information as is imposed upon the
Administrative Agent or the Lenders hereunder. Any Person required to maintain
the confidentiality of information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
information as such Person would accord to its own confidential information.
Notwithstanding anything to the contrary provided herein, this obligation of
confidence shall cease three years from the date the information was furnished,
unless the Borrower requests in writing at least 30 days prior to the expiration
of such three year period, to maintain the confidentiality of such information
for an additional three year period. The Borrower waives any and all other
rights it may have to confidentiality as against the Administrative Agent and
the Lenders arising by contract, agreement, statute or law except as expressly
stated in this Section 9.14.
Section 9.15 FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE LOAN
DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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EXECUTED as of the date first above written.
BORROWER:
ATP OIL & GAS CORPORATION
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Senior Vice President and
Chief Financial Officer
ADMINISTRATIVE AGENT AND ISSUING LENDER:
UNION BANK OF CALIFORNIA, N.A.,
as Administrative Agent and as Issuing Lender
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Senior Vice President
By:
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Name:
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Title:
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LENDERS:
COMMITMENT UNION BANK OF CALIFORNIA, N.A.
$67,741,935.48
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Senior Vice President
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
Assistant Vice President
COMMITMENT GUARANTY BANK, FSB
$32,258,064.52
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President